Principles 8-10 Vocabulary

Question 1

Principle 8

Developed Nation

Answer 1

Wealthy country w/ advanced industries.

ex: USA, Japan

Question 2

Principle 8

Developing Nation

Answer 2

Country improving economically.

ex: India, Brazil

Question 3

Principle 8

Standard of living

Answer 3

Quality of life measurement.

ex: Access to education, healthcare

Question 4

Principle 8

Quality of life

Answer 4

Overall well-being and satisfaction.

ex: Happiness, satisfaction

Question 5

Principle 8

GDP (Gross Domestic Product)

Answer 5

Total economic output.

Total value of goods and services

Question 6

Principle 8

Per capita

Answer 6

Per person measurement.

GDP divided by population

Question 7

Principle 8

Productivity

Answer 7

Efficiency of production.

ex: Output per worker per hour

Question 8

Principle 8

Paradox of Plenty

Answer 8

Rich in resources but poor.

Nigeria (rich in oil, but high poverty)

Question 9

Principle 8

Poverty

Answer 9

Lack of basic necessities.

ex: Lack of food, shelter

Question 10

Principle 8

Inequality

Answer 10

Economic gap between people.

Ex: Income gap between rich and poor

Question 11

Principle 8

Social mobility

Answer 11

Ability to move up economically.

ex: Moving from lower to higher class

Question 12

Principle 8

Vertical mobility

Answer 12

Changing social classes.

ex: A factory worker becoming a manager

Question 13

Principle 8

Globalization

Answer 13

Worldwide integration (combing one thing w/ others)

ex: Trade between nations

Question 14

Principle 8

Free trade

Answer 14

No restrictions on imports/exports.

Ex: Importing goods without tariffs

Question 15

Principle 8

Outsourcing

Answer 15

Contracting work to external parties.

Ex: Hiring workers overseas (another country) for customer service

Question 16

Principle 9/10

Inflation and Unemployment

Answer 16

Prices rise and job unavailability.

(e.g., 1970s oil crisis)

Question 17

Principle 9/10

Fractional reserve banking

Answer 17

Banks keep fraction of deposits.

(e.g., U.S. banks)

Question 18

Principle 9/10

Inflation

Answer 18

General increase in prices.

(e.g., rising gas prices)

Question 19

Principle 9/10

Purchasing power

Answer 19

Ability to buy goods w/ inflation

(e.g., wage increase)

Question 20

Principle 9/10

Money Supply

Answer 20

Total money available

Question 21

Principle 9/10

Monetary policy

(what does it have to do with money supply?)

Answer 21

Control of money supply.

(e.g., interest rate changes)

Question 22

Principle 9/10

Federal Reserve (The Fed.)

Answer 22

Central bank of USA

(e.g., Janet Yellen)

Question 23

Principle 9/10

Interest rates

Answer 23

Cost of borrowing money

(e.g., mortgage rates)

Question 24

Principle 9/10

Unemployment

Answer 24

People without jobs.

(e.g., recession layoffs)

Question 25

Principle 9/10

Expansionary policy

Answer 25

Stimulates economy

(e.g., tax cuts)

Question 26

Principle 9/10

Contractionary policy

(think about a negative impact in the economy!)

Answer 26

Slows down economy.

(e.g., higher taxes)

Question 27

Principle 9/10

Fiat money

Answer 27

Value by government order.

(e.g., U.S. dollar)

Question 28

National debt

Answer 28

Total owed by government.

(e.g., trillions in bonds)

Question 29

Principle 9/10

Debt ceiling

Answer 29

Maximum debt allowed.

(e.g., U.S. Congress limit)

Question 30

Principle 9/10

Currency

Answer 30

Type of money.

(e.g., euro, yen)

Question 31

Principle 9/10

Exchange rates

Answer 31

Value of one currency vs. another.

(e.g., USD to EUR)

Question 32

Principle 9/10

Fiscal policy

(what does the gov do here?)

Answer 32

Government spending/taxing.

(e.g., stimulus packages)

Question 33

Principle 9/10

Income tax

Answer 33

Tax on earnings

(e.g., IRS deductions)

Question 34

Principle 9/10

Tax brackets

Answer 34

Different income tax rates.

(e.g., 10%, 20%, 30%)

Question 35

Principle 9/10

Progressive taxation

Answer 35

Higher earners taxed more.

(e.g., Warren Buffett)

Question 36

Principle 9/10

Tax exemptions

Answer 36

Income not taxed.

(e.g., charitable donations)

Question 37

Principle 9/10

Tax credit

Answer 37

Deductions from taxes owed.

(e.g., child tax credit)

Question 38

Principles 9/10

Monetary Supply

Answer 38

encouraging or discouraging banks from making loans