Ch. 7 T &F

Economics is the study of the production and distribution of scarce resources.
True False

The capital market refers to money made available by banks and other lenders as loans, primarily to business firms but to consumers as well.
True False

GDP (gross domestic product) is the total value of a nation's production of goods and services for a year.
True False

Current dollars are valued from a particular year in order to account for changes in the value of dollars.
True False

The Federal Reserve Board controls the supply of money and credit and interest rates.
True False

Managerialism is control of the corporation by stockholders rather than professional managers.
True False

A hostile takeover is the purchase of stock in a corporation by an outsider and the subsequent ousting of the prior management.
True False

Corporate raiders are investors who arrange to purchase stock in a hostile takeover effort.
True False

The trade deficit is the difference that results when a country exports more goods than it imports.
True False

The trade deficit is the difference that results when a country imports more goods than it exports.
True False

National income accounting is data collected by government that describes the nation's unemployment rate.
True False

Congress controls the supply of money, plus credit and interest rates.
True False

The Federal Reserve Board raises and lowers tax rates to control inflation.
True False

Protectionism is maintaining high tariffs in order to protect domestic producers from foreign competition.
True False

Illegal drug activity as well as unreported tops by resturants workers would both be considered part of the underground economy.
True False

The majority of the U.S. federal debt is now owed to foreign nations.
True False

The United States has run trade deficits every year in the 21st Century.
True False

Social Security is the largest of all entitlement expenditures.
True False

Supply-side economics theory argues that the government should keep marginal tax rates high to reduce the federal budget deficit.
True False