Chapter 3 Test vocab

Question 1

Capitalism

Answer 1

An economic system in which private citizens, own and use the factors of production to produce and generate profits

Question 2

What is capitalism based on?

Answer 2

Free market

Question 3

Free market

Answer 3

Without government regulation and interference

Question 4

Free enterprise

Answer 4

An economic system in which privately owned businesses have the freedom to operate with limited government intervention

Question 5

Economic freedom

Answer 5

The ability to buy things you want and to choose your occupation and employer

Question 6

Voluntary Exchange

Answer 6

The act of buyers and sellers freely exchanging goods

Question 7

Private property rights

Answer 7

The right to own and control your own possessions

Question 8

Profit motive

Answer 8

The incentive to improve ones material well being

Question 9

Competition

Answer 9

The struggle among sellers to attract consumers

Question 10

GDP

Answer 10

Gross domestic product

Question 11

Gross domestic product

Answer 11

The dollar value of all goods and services in a country in a twelve month period

Question 12

What has made the USA the second largest economy

Answer 12

Gross domestic product

Question 13

What was America’s poverty rate during the gilded age

Answer 13

56%

Question 14

What is America’s current poverty rate

Answer 14

12%

Question 15

Entrepreneur

Answer 15

A person who organizes and manages the factors of production

Question 16

Risky

Answer 16

High rate of return

Question 17

The role of the consumer is always _____

Answer 17

Sovereign (always right)

Question 18

Minimum wage

Answer 18

Lowest legal wage that can be paid to most workers

Question 19

Social security

Answer 19

Federal programs of disability and retirement benefits that covers most working people

Question 20

Medicare

Answer 20

Federal health insurance program for senior citizens, regardless of income

Question 21

Medicaid

Answer 21

Federal health insurance program for lower income families

Question 22

Inflation

Answer 22

A rise in the general level of prices

Question 23

Fixed income

Answer 23

Income that does not increase overtime

Question 24

Risk taking individual in search of profit

Answer 24

Entrepreneur

Question 25

Ruler of the market in determining goods and services produced

Answer 25

Consumer

Question 26

Economic system with combination of command, traditional and market economies

Answer 26

Mixed economy

Question 27

Role of national government in preserving marketplace competition

Answer 27

Regulator

Question 28

Something that stimulates activity among forces or ppl

Answer 28

Catalyst

Question 29

When an economy is capitalist and has free markets, it can be said that the economy is based on....

Answer 29

Free enterprise

Question 30

One of the characteristics of the US economy is _____ role of the government

Answer 30

Limited

Question 31

Between 2007 and 2009, the US went through a difficult economic period called the....

Answer 31

Great Recession

Question 32

____ motive is what drives ppl and organizations to improve their material well being

Answer 32

Profit

Question 33

____ ____ Rights allow people to own and control their possessions as they see fit, as long as it does not interfere with the rights of others

Answer 33

Private property