Chapter 23 Vocab

Question 1

private goods

Answer 1

goods that, when consumed by one individual, cannot be consumed by another

-subject to the exclusion principle (a person is excluded from using that good or service unless he or she pays for it)

Question 2

goods that, when consumed by one individual, cannot be consumed by another

-subject to the exclusion principle (a person is excluded from using that good or service unless he or she pays for it)

Answer 2

private goods

Question 3

public goods

Answer 3

goods that can be consumed by one person without preventing the consumption of the good by another

-subject to the nonexclusion principle (no one is excluded from consuming the benefits of a public good whether or not he or she pays)

Question 4

goods that can be consumed by one person without preventing the consumption of the good by another

-subject to the nonexclusion principle (no one is excluded from consuming the benefits of a public good whether or not he or she pays)

Answer 4

public goods

Question 5

externality

Answer 5

the unintended side effect of an action that affects someone not involved in the action

Question 6

the unintended side effect of an action that affects someone not involved in the action

Answer 6

externality

Question 7

monopoly

Answer 7

a sole provider of a good or service

Question 8

a sole provider of a good or service

Answer 8

monopoly

Question 9

antitrust laws

Answer 9

laws to control monopoly power and to preserve and promote competition

Question 10

laws to control monopoly power and to preserve and promote competition

Answer 10

antitrust laws

Question 11

merger

Answer 11

a combination of two or more companies to form a single business

Question 12

a combination of two or more companies to form a single business

Answer 12

merger

Question 13

natural monopoly

Answer 13

a market situation in which the costs of production are minimized by having a single firm produce the product

Question 14

a market situation in which the costs of production are minimized by having a single firm produce the product

Answer 14

natural monopoly

Question 15

recall

Answer 15

a company pulls a product off the market or agrees to change it to make it safe

Question 16

a company pulls a product off the market or agrees to change it to make it safe

Answer 16

recall

Question 17

Real GDP

Answer 17

shows an economy’s production after the distortions of price increases have been removed. This eliminates the false impression that output has gone up when prices go up.

Question 18

shows an economy’s production after the distortions of price increases have been removed. This eliminates the false impression that output has gone up when prices go up.

Answer 18

Real GDP

Question 19

business cycle

Answer 19

when the economy does not grow at a constant rate, but instead, it goes through alternating periods of growth and decline that we call the ______

Question 20

when the economy does not grow at a constant rate, but instead, it goes through alternating periods of growth and decline that we call the ______

Answer 20

business cycle

Question 21

expansion

Answer 21

takes place when real GDP goes up

Question 22

takes place when real GDP goes up

Answer 22

expansion

Question 23

peak

Answer 23

the highest point in an expansion

Question 24

the highest point in an expansion

Answer 24

peak

Question 25

recession

Answer 25

takes place when real GDP goes down for six straight months, although most last longer than that

Question 26

takes place when real GDP goes down for six straight months, although most last longer than that

Answer 26

recession

Question 27

civilian labor force

Answer 27

includes all civilians 16 years old or older who are either working or are looking for work

Question 28

includes all civilians 16 years old or older who are either working or are looking for work

Answer 28

civilian labor force

Question 29

unemployment rate

Answer 29

the percentage of people in the civilian labor force who are not working but are looking for jobs

Question 30

the percentage of people in the civilian labor force who are not working but are looking for jobs

Answer 30

unemployment rate

Question 31

fiscal policy

Answer 31

changes in government spending or tax policies

Question 32

changes in government spending or tax policies

Answer 32

fiscal policy

Question 33

consumer price index (CPI)

Answer 33

a popular measure of the price level, which is made up of the prices about 400 products commonly used by consumers (the government samples prices every month for about 400 products commonly used by consumers to keep track of inflation)

Question 34

a popular measure of the price level, which is made up of the prices about 400 products commonly used by consumers (the government samples prices every month for about 400 products commonly used by consumers to keep track of inflation)

Answer 34

consumer price index (CPI)

Question 35

inflation

Answer 35

sustained increase in the general level of prices

Question 36

sustained increase in the general level of prices

Answer 36

inflation

Question 37

food stamps

Answer 37

government coupons that can be used to purchase food

Question 38

government coupons that can be used to purchase food

Answer 38

food stamps

Question 39

Women, Infants, and Children (WIC) program

Answer 39

provides help with nutrition and health care to low-income women, infants, and children up to age 5

Question 40

provides help with nutrition and health care to low-income women, infants, and children up to age 5

Answer 40

Women, Infants, and Children (WIC) program

Question 41

workfare

Answer 41

term used to describe programs that require welfare recipients to exchange some of their labor in exchange for benefits

Question 42

term used to describe programs that require welfare recipients to exchange some of their labor in exchange for benefits

Answer 42

workfare

Question 43

progressive income tax

Answer 43

the tax rate is lower at lower incomes and higher for higher incomes

Question 44

the tax rate is lower at lower incomes and higher for higher incomes

Answer 44

progressive income tax

Question 45

Earned Income Tax Credit (EITC)

Answer 45

gives tax credits and even cash payments to qualified workers

Question 46

gives tax credits and even cash payments to qualified workers

Answer 46

Earned Income Tax Credit (EITC)