Name __Lauren Sutherland__Chapter 21. What is the difference between macroeconomics and microeconomics?Macroeconomics are concentrates on the whole operation of a nation’s economy as a whole. While microeconomics concentrates on the behavior of people and organizations in markets for particular products or services. 2. What does Adam Smith’s term invisible hand mean? How does the invisible hand create wealth for a country?What Adam Smith’s term invisible hand means is when self-directed gain leads to social and economic benefits for the whole community. Invisible hand creates wealth for a country because it allows business more to hire more employees and provide jobs for other people. Since they now have more help they can grow/produce more goods to sell in order to earn more profit. 3. What are the four basic rights that people have under free-market capitalism?The four basic rights that people have under the free-market capitalism is the right own private property, the right to own a business and keep all that’s business’s profits,the right to freedom of competition, and the right to freedom of choice. 4. How are prices determined?Prices are determined by supply and demand. 5. What are the four degrees of competition, and what are some examples of each?The four degrees of competition are prefect competition and an example is perfect information and well defined property rights, monopolistic competition and an example of that is hotels and restaurants, oligopoly and example is Australia and Canada, and monopoly some examples are railroads and trucking companies. 6. What are the benefits and drawbacks of socialism?Some benefits of socialism are free childcare, longer vacations, free healthcare, shorter work weeks. While some drawbacks are few incentives for businesspeople to take risks along with few invention and innovations because the reward is not as greatas in capitalistic countries.7. What are the characteristics of a mixed economy?The characteristics of a mixed economy is some allocation of resources is made by the market and some by the government. It also reflects the characteristics of both capitalism and socialism. 8. Name the three economic indicators and describe how well the United States is doing based on each indicator.The three key economic indicators are the Gross Domestic Product, and unemployment rate, and the price indexes. The United States GDP approximately about $14 trillion. Our high GDP allows citizens to enjoy a high standard of living. In2000, the U.S. reached it lowest unemployment rate in over 30 years. The recession of 2008-2009 may lead to unemployment to at least 10 percent. The consumer prince index has not risen to high levels keeping inflation in check.9. What’s the difference between a recession and a depression?A recession is characterized as a period of negative economic growth for two consecutive quarters. While a recession is unemployment will rise, output fall and government borrowing increase.10. How does the government manage the economy using fiscal policy?How the government manages the economy using fiscal policy is by taxation and government
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