Chapter 1

Question 1

what are the 4 categories of decision makers in an economy

Answer 1

households: decide how much to spend
Businesses: decide how much to invest
Government: decide spending and investing
World economy: decide exports and imports

Question 2

Scarcity defintion

Answer 2

world of limited resources with unlimited wants and needs

Question 3

Incentive

Answer 3

Something that causes a person to act a certain way

Question 4

Roles of government

Answer 4

Enforce property rights and laws, provide public goods, stabilize the economy using policies

Question 5

What policy is a long term policy

Answer 5

Growth policy

Question 6

What is the fiscal policy

Answer 6

A short term policy that uses G and T

Question 7

What is the monetary policy

Answer 7

A short run policy that uses MS and r.

Question 8

What is the growth policy

Answer 8

A long term policy that uses education and Incentives

Question 9

What do you look at to analyze economic performance

Answer 9

Output
Inflation
unemployment

Question 10

Inflation definition

Answer 10

Increase in overall price level

Question 11

hyperInflation definition

Answer 11

Rapid increase in price level

Question 12

DeInflation definition

Answer 12

decrease in price level

Question 13

How is the quality of life in a country measured

Answer 13

RGDP

Question 14

economic expansion

Answer 14

The period from a trough to a peak

Question 15

Economic recession

Answer 15

Period from peak to trough

Question 16

Challenges US economy faces

Answer 16

1) slow economic growth
2) inflation
3) government debt