BMAL 590 BUSINESS FINANCE EXAM
SCRIPT 2026 COMPREHENSIVE QUESTIONS
AND ANSWERS GRADED A+
⩥ Keynesian economics. Answer: The central theme is the role of
government in the economy.
Keynes argued that government intervention could be an effective toolin
addressing the problems of unemployment and sluggishness output.
Thus, government becomes a facilitator in stimulating aggregate demand
and lifting the economy out of a recession. The definition of people not
working according to Keynes are those not able to find a job at the
current wage rate.
Keynesian economics was deemed to be the answer until the events of
the 1970s and 1980s demonstrated the limitations of government
intervention and led to considerable disillusionment.
⩥ Walter Heller. Answer: used the term "Fine-tuning" to explain the role
of government in regulating unemployment and inflation.
⩥ The law of demand states that. Answer: price and quantity demanded
are inversely related
,The law of demand states that the quantity demanded of goods falls
when the price of the goods rises, and vice versa, provided all other
factors that affect buyers' decisions are unchanged.
The quantity demanded of a consumer good such as ice cream depends
on:
- The price of ice cream
- The prices of related goods
- Consumers' incomes
- Consumers' tastes
- Consumers' expectations about future prices and incomes
- Number of buyers, etc.
The law of demand says that the quantity demanded of a good is
inversely related to its price, provided all other factors are unchanged.
Shifts in demand are caused by changes in the factors of demand:
- Economics (the economy, consumer income, GDP, xfc etc.)
- Prices of related goods
- Consumer tastes and preferences
- Legal/Government
- Expectations about future prices and prospects
- Technology
,- Number of buyers
⩥ examples of how factors can shift an entire demand curve include:.
Answer: Consumer Income:
- As income increases, the demand for a normal good will increase.
- As income increases, the demand for an inferior good will decrease.
Prices of Related Goods:
- When a fall in the price of one good reduces the demand for another
good, the two goods are called substitutes.
- When a fall in the price of one good increases the demand for another
good, the two goods are called complements.
When considering the factors involved one should be able to understand
how changes in the factors cause changes in demand, with an entire shift
not a movement along the demand curve.
⩥ Quantity supplied. Answer: the amount of a good that sellers are
willing and able to sell.
⩥ Supply. Answer: a full description of how the quantity supplied of a
commodity responds to changes in its price.
, ⩥ The law of supply states:. Answer: the quantity supplied of a good
rises when the price of the good rises, as long as all other factors that
affect suppliers' decisions are unchanged
⩥ Market Supply. Answer: the combined supply of everyone willing and
able to sell a good in a market. Market supply is graphically represented
by a positively-sloped market supply curve (remember previous slide),
which can be derived by combining, or adding, the individual supplies of
every seller in the market.
⩥ Stagflation. Answer: a period of slow economic growth and high
unemployment (stagnation) while prices rise (inflation)
a phenomenon that has baffled economists. Stagflation is often caused
by a supply side shock. For example, rising commodity prices, such as
oil prices, will cause a rise in business costs (transport more expensive)
and short run aggregate supply will shift to the left. This causes a higher
inflation rate and lower GDP output.
An economy is said to be in stagflation when overall price levels
increase rapidly (inflation) even as the economy itself is in a recession or
high levels of unemployment (stagnation).
This is precisely what happened in the U.S. during the 1970s. Oil prices
increased dramatically. The production costs of goods spiraled leading to
SCRIPT 2026 COMPREHENSIVE QUESTIONS
AND ANSWERS GRADED A+
⩥ Keynesian economics. Answer: The central theme is the role of
government in the economy.
Keynes argued that government intervention could be an effective toolin
addressing the problems of unemployment and sluggishness output.
Thus, government becomes a facilitator in stimulating aggregate demand
and lifting the economy out of a recession. The definition of people not
working according to Keynes are those not able to find a job at the
current wage rate.
Keynesian economics was deemed to be the answer until the events of
the 1970s and 1980s demonstrated the limitations of government
intervention and led to considerable disillusionment.
⩥ Walter Heller. Answer: used the term "Fine-tuning" to explain the role
of government in regulating unemployment and inflation.
⩥ The law of demand states that. Answer: price and quantity demanded
are inversely related
,The law of demand states that the quantity demanded of goods falls
when the price of the goods rises, and vice versa, provided all other
factors that affect buyers' decisions are unchanged.
The quantity demanded of a consumer good such as ice cream depends
on:
- The price of ice cream
- The prices of related goods
- Consumers' incomes
- Consumers' tastes
- Consumers' expectations about future prices and incomes
- Number of buyers, etc.
The law of demand says that the quantity demanded of a good is
inversely related to its price, provided all other factors are unchanged.
Shifts in demand are caused by changes in the factors of demand:
- Economics (the economy, consumer income, GDP, xfc etc.)
- Prices of related goods
- Consumer tastes and preferences
- Legal/Government
- Expectations about future prices and prospects
- Technology
,- Number of buyers
⩥ examples of how factors can shift an entire demand curve include:.
Answer: Consumer Income:
- As income increases, the demand for a normal good will increase.
- As income increases, the demand for an inferior good will decrease.
Prices of Related Goods:
- When a fall in the price of one good reduces the demand for another
good, the two goods are called substitutes.
- When a fall in the price of one good increases the demand for another
good, the two goods are called complements.
When considering the factors involved one should be able to understand
how changes in the factors cause changes in demand, with an entire shift
not a movement along the demand curve.
⩥ Quantity supplied. Answer: the amount of a good that sellers are
willing and able to sell.
⩥ Supply. Answer: a full description of how the quantity supplied of a
commodity responds to changes in its price.
, ⩥ The law of supply states:. Answer: the quantity supplied of a good
rises when the price of the good rises, as long as all other factors that
affect suppliers' decisions are unchanged
⩥ Market Supply. Answer: the combined supply of everyone willing and
able to sell a good in a market. Market supply is graphically represented
by a positively-sloped market supply curve (remember previous slide),
which can be derived by combining, or adding, the individual supplies of
every seller in the market.
⩥ Stagflation. Answer: a period of slow economic growth and high
unemployment (stagnation) while prices rise (inflation)
a phenomenon that has baffled economists. Stagflation is often caused
by a supply side shock. For example, rising commodity prices, such as
oil prices, will cause a rise in business costs (transport more expensive)
and short run aggregate supply will shift to the left. This causes a higher
inflation rate and lower GDP output.
An economy is said to be in stagflation when overall price levels
increase rapidly (inflation) even as the economy itself is in a recession or
high levels of unemployment (stagnation).
This is precisely what happened in the U.S. during the 1970s. Oil prices
increased dramatically. The production costs of goods spiraled leading to
