Chapter 5 Section Reviews Flashcards Preview

Economics > Chapter 5 Section Reviews > Flashcards

Flashcards in Chapter 5 Section Reviews Deck (10):

What is a society’s economic problem?

How to best accomplish its economic goals.


How is unemployment a problem for society?

Unemployment is a waste of human labor. And it's usually accompanied by poverty, crime, and despair.


What is the difference between extensive growth and intensive
growth of an economy?

Extensive growth - economy produces more goods and services by increasing its amount of land, labor, or capital.
Intensive growth - economy does not increase the amount of factors of production but rather increases in efficiency.


What are the three critical questions that every society must answer as it seeks to meet its economic goals?

1. What will be produced?
2. How will it be produced?
3. Who will receive what is produced?


How is the consumer goods/capital goods tradeoff a matter of spending versus saving?

When people spend money for consumer goods rather than save it. Financial institutions do not have money available to loan to businesses and the inverse is true.


What is the difference between a labor intensive business and a capital intensive business?

1. Labor Intensive - uses a higher number of workers to produce its product.
2. Capital Intensive - Places a greater emphasis on machinery and equipment to produce its products.


What should be the standard that Christians use to answer the distribution question?



List the four economic goals of most societies and in your own words explain the economic importance of each.

1. Low level of unemployment - Anyone should be employed who is willing to seek employment.
2. Stable level of prices - Not having prices fluctuate in the market.
3. Healthy rate of economic growth - Availability for more goods and services.
4. Fair distributing of income - The opportunity to enjoy all goods and services available.


Identify the three biblical principles that provide a basis for a Christian’s treatment of the poor.

1. Love thy neighbor as thyself.
2. To do good to all men.
3. Their works be glorified to our Father in heaven.


What way does the Bible give for a person to generate his own personal income? Use Scripture to support this position.

Work - Proverbs 10:4
We work to earn money then we can buy what we need and want.