Management Chapter 2 7 the next wave of marketable innovations may involve

262. The _________ is a statistic used to compute the pace of inflation or deflation.

263. The measure used to report price changes at the wholesale level is the:

264. _____________ refers to a general rise in the price level of goods and services over time.

265. __________ is a condition in which the price increases are slowing.

266. __________ is a condition in which the average level of prices is actually falling.

267. A __________ is a very severe recession that is usually accompanied by deflation.

268. In recent years, U.S. manufacturing sector has experienced ___________ productivity.

269. The next wave of marketable innovations may involve new ways to produce and conserve

energy. If we can turn new technology into marketable products and services that produce energy

to run our businesses and homes, the U.S. could see a surge in output of goods and services. The

Department of Economic Development would document this surge by measuring the ____.

270. One reason the CPI is monitored very closely by government, businesses, and workers is

that:

271. ____________ in the service sector has not shown the significant improvement that it has

in the manufacturing sector. There are significant advances in the quality of service, but workers

in this sector are unable to increase the number of persons served in a given time period.

272. Which of the following indicators provides the clearest indication that an economy is

experiencing deflation?

273. A collapse in Buldovia’s banking system eventually led to companies unable to borrow

money to run their businesses. Firms terminated employees. These circumstances cut into

consumers’ purchasing power, causing a severe decline in the prices of goods and services,

better known as _____.

274. Which of the following strategies may have a net effect on inflation?

275. The nation of Florentina is in the midst of a serious economic downturn. The nation’s

GDP has declined steadily for over five years and is now at its lowest level in over 50 years.

Florentina’s unemployment rate is at an all-time high and the nation’s CPI is falling. Florentina’s

economic condition is referred to as a:

276. John complained to his buddy, Frank, that prices have increased a lot over the past year.

Frank disagreed, saying that the prices of some goods have gone up a bit, but other prices have

declined, noting that you can get some good buys on houses right now. Frank feels that the

average price of consumer goods hasn’t changed. Frank and John can refer to the __________ to

learn how government economists currently view the price situation.

277. Emily recently quit her job at a major corporation because she saw little chance for

advancement. Although she is still searching for a new position, Emily believes the economy is

healthy and she hears that several firms are hiring people with her qualifications. Which of the

following statements about Emily’s current situation is most accurate? Emily is:

278. Kathleen’s company produces computer monitors and other peripheral devices for

computers. About six months ago, Kathleen began to keep track of number of hours worked, and

the resulting output at her particular work site. Comparing the results, she found that the number

of workers (and the hours they worked) remained relatively steady over the past six months;

however, the work site’s output increased significantly. This indicates that:

279. Which of the following statements about business cycles in the U.S. is most accurate?

280. Which of the following statements about productivity in the service sector of the U.S.

economy is most accurate?

281. Chase is a recent college graduate with a new job as an engineering trainee for a large

defense company. Now that he is making good wages, he hopes to start saving for his first house

and also contribute toward the company retirement plan. As he looks over his monthly bills,

Chase is concerned about ever getting ahead of the game. His food bill, car payment, and

mounting gasoline payments keep him in the “just making ends meet” category. As his mind

wanders back to the “good ol’ college days,” he reflects on a time when gas and food seemed a

lot more reasonable. Chase is experiencing the effects of:

282. Gabby and Gus Malloy recently got pre-approved on a loan for their first house purchase.

They are speculating on how much they should bid on their number one choice, a small, three–

bedroom bungalow near a major college town. Which of the following indicators may be an

important factor in whether they are able to successfully put in a low bid?

283. Colin just landed a job working for a major online gaming company in Silicon Valley. In a

lot of ways, this is his dream job come true, the chance to work for a company that makes

gaming software and live in California at the same time. As his plane lands at San Jose

International, he pictures a snazzy apartment with a palm tree right outside the front door. A few

hours later, as he meets a property manager of a large apartment complex, his heart sinks. The

price of apartments is out of sight! Back at the hotel, he logs on to the Bureau of Labor Statistics

to try to get a better picture of why the cost of housing is so high in this region of the U.S. Which

factors may be causing the rise in the price of housing?

284. At the onset of the recent economic slowdown, prices at the grocery stores continued to

rise. In some cases, products such as milk and bread almost doubled in price. A Boston

newspaper reported, “The price of eggs was up 40% and milk was up 26%.” Consumers were

already being hit with high energy costs, and now their confidence in the economy was further

shaken with job cuts and a loss of discretionary income due to increases in food prices. The

economy was slowing, but prices were rising, signifying the potential for _________.

285. ____________ refers to the efforts of the federal government to keep the economy stable

by increasing or decreasing taxes and/or government spending.

286. Fiscal policy involves increases or decreases in:

287. When the federal government’s collection of tax revenues is less than what it spends in a

given year, it results in a:

288. When the government runs a continual budget deficit, it increases the:

289. In the U.S., the __________ has the role of managing the money supply and interest rates.

290. One way to lessen the U.S. government budget deficit is to:

291. Efforts by the Federal Reserve Bank (the Fed) to control the money supply and interest

rates are known as: