QUIZ 6 ECON 550 MBA page 1 of 3 Chapter XXXXXXXXXXin Textbook 22 Questions Chapter 11 1. What is a ‘Mixed Economy’? (keep answer short & in your words, not copy/ paste from book) 2. What is a ‘Open...

1. What is a ‘Mixed Economy’? (keep answer short & in your words, not copy/ paste from book)
Economy is characterized by participation which produces activities. As the name suggests, Mixed economy is characterized by participation by private firms and government. Private segment includes both business establishment and household.
2. What is a ‘Open Economy’? (keep answer short & in your words, not copy/paste from book)
In addition to what is started above about Mixed economy, this type of economy is also characterized by domestic and foreign goods & services. Interactions of these participations produces revenue and expense, thus overall cashflow in form of Economic condition. Thus, called open economy.
3. What type is the USA?
USA has participation by household, domestic and government with foreign and domestic segments. In accordance to above submission in two questions it can be concluded that USA is open mixed economy.
4. What country are you from and what type is your country? (2-part answer)
Germany is like USA is mixed open economy.
5. With GDP/Gross National Product in the USA, this is calculated by which one, A or B?
A. Only the end selling price of goods, products and services
OR
B. End selling prices of goods, products, services + sales of all materials sold from manufacturing companies providing all of the raw materials to sellers of end products, goods & services
As stated above, US economy is characterized by participation of domestic, foreign, business and government. All goods and services are summed up. For foreign import and export, Export is subtracted from import. Economic activities characterized by Good domestic product (GDP) as variable. And measured by expenditure or output approach. Based on this, it is concluded that US GDP can be calculated with “option B”.
6. What are ‘Durable Goods/Products’ and give examples?
Goods are utilized for daily necessity or auxiliary activities. Goods like furniture, automobiles last for more than 3 years, that is inventories for more than 3 years. Such goods utilized for personal consumption are called Durable goods.
7. What are ‘Non-Durable Goods/Products’ and give examples?
Personal goods & services are consumed by every participant in economy. Goods & services which are used for daily necessities and not stored for more than 3 years are called Non-durable goods. Examples are grains, clothes and other foods items, energy source like gasoline and other items consumed mostly on day to day basis.
8. What are ‘Services’ and give examples?
Based on above submission, it is easy to see that personal consumption expenses are largest, that is 3rd of total expenditure. Apart from Durable and non-durable, services are also included as expenses. All economic participant needs public transport, education, medical necessity and other items which are categories by services.
9. ‘Net Export Spending’ is calculated with the difference between what USA buys from other countries (Imports) and what other countries buy from the USA (Exports); this can be in the positive (selling to Int’l more than buying from Int’l ) or negative (buying more from Int’l than selling to Int’l )?
TRUE or False
10. What is better for the USA Economy, positive or negative and why?
Economic activity produces revenue and expenditure from domestic and foreign segments. For example, goods & services are produced in USA. Integrated circuits, defense items, refined petroleum, cars, parts and other items. These are highest selling products in foreign markets. That is consumed by participant of other countries and therefore called exports. Medical care items, pharmaceutical, automobile parts, etc. produced on other countries are consumed by participant of USA. Therefore, these are called import items. For any country export generates revenue and import generates expenditure. Therefore, in total cashflow export, that is positive cashflow more than negative outflow, that is import is prefe
ed.
11. What is ‘Inflation’ with pricing of goods/products & services? (is pricing/costs increasing or decreasing)
Indices are used to check / reflect economic activity. Inflation is most widely and most popular indices. Economic activity produces goods & services and therefore inflation is index reflecting price of all goods and services. For example, when export is very high a lot of revenue is generated. Businesses are flourishing and people get jobs for which they are paid. At the same time personal expenditure are being met and more money is spent on more goods and services. Overall economic activities are very high and therefore, higher prices for all goods & services for entire economy. Inflation is measured over a period of time.

12. What is ‘Deflation’ with pricing of goods/products and services? (is pricing/costs increasing or decreasing)
As the name suggests, deflation is opposite of inflation. Prices of all goods and services within economy is called...