Economics

Question 1

The study of rational human behavior as it relates to production, consumption, and transfer of wealth

Answer 1

Economics

Question 2

The wealth and resources of a country or region, especially in terms of the production and consumption of goods and services

Answer 2

Economy

Question 3

A period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in Gross Domestic Product (GDP) in two successive quarters

Answer 3

Recession

Question 4

A long and severe recession in an economy or market

Answer 4

Depression

Question 5

A venue where producers and sellers can come together to buy and sell goods

Answer 5

Market

Question 6

The value of all the goods and services a country produces in a year

Answer 6

Gross Domestic Product (GDP)

Question 7

An economic system where private business owners produce goods and provide services for sale in order to make a profit, not for personal consumption.
Allows economic freedom, consumer choice, and economic growth.

Answer 7

Capitalism

Question 8

An economic system where there are no private business owners; there is a system of collective or government ownership and administration of production and distribution of goods.

The means of production, distribution, and exchange are owned or regulated by the community as a whole.

Answer 8

Socialism

Question 9

An economic system where no private property exists and there is centralized production and distribution.

Answer 9

Communism

Question 10

A market structure where all producers sell an identical product (homogeneous), producers cannot manipulate the price of the product, market share does not influence the price, and buyers have complete information. The opposite of a monopoly.

Answer 10

Perfect competition

Question 11

A market structure where many companies offer competing products or services that are similar, but not perfect, substitutes

Answer 11

Monopolistic competition

Question 12

A market structure where there is only one producer/seller. The monopoly has control over the price of its goods and services. The market is restricted due to economic, political, or social barriers.

Answer 12

Monopoly

Question 13

A market structure where only a few producer/sellers make up the industry. It has control over prices and maintains barriers from others entering the market.

Answer 13

Oligopoly

Question 14

The exchange of money for goods and services by private purchases- it makes up the demand side of supply and demand principles

Answer 14

Consumer spending

Question 15

A plan for spending and saving money

Answer 15

Budget

Question 16

A bank account where the account holder can make deposits and withdrawals, and access is unlimited

Answer 16

Checking account

Question 17

A bank account where the account holder can make deposits and withdrawals, and the account earns interest. This type of account is commonly used to store money for longer periods of time. The money is readily accessible.

Answer 17

Savings account

Question 18

A bank account with a higher interest rate than a savings account but with limited withdrawals per statement cycle. This type of account usually requires a minimum balance

Answer 18

Money Market accounts

Question 19

A bank account with a higher interest rate than a money market account but from which the money cannot be withdrawn for a set period of time

Answer 19

Certificates of Deposit (CD)

Question 20

A retirement account that offers tax advantages but cannot be withdrawn until retirement (age 59.5) without penalty

Answer 20

Individual Retirement Account (IRA)

Question 21

A government bond that is exempt from state and local taxes and is used to fund capital projects. The bond has a fixed interest rate for a fixed period of time, usually 15-30 years. Federal taxes are applied at the time the bond matures.

Answer 21

U.S. Savings Bonds

Question 22

Credit leads to ____ in spending, thus _____ income levels in the economy

Answer 22

increase; increasing

Question 23

The portion of credit consumers use to buy non-investment services. One form of this is a credit card.

Answer 23

Consumer Credit

Question 24

Advantages of consumer credit

Answer 24

Consumers can purchase goods and services & pay for them later over an extended period of time (borrowing basically)

Question 25

Disadvantages of consumer credit

Answer 25

If consumers fail to repay a loan or a credit card balance, this impacts their credit scores, affects terms and conditions, and results in late fees and penalties

Question 26

Short-term borrowing that ends with the borrower making one payment by the end of the credit period

Answer 26

Non-Installment Credit

Question 27

A specific amount of money is lent to the borrower- the total purchase price of the good or service. This type of credit is typically used by car dealerships

Answer 27

Close-end Credit

Question 28

This type of consumer credit is found with most credit cards. With this kind of credit, the lender extends credit for use by the consumer with an outside limit

Answer 28

Revolving Open-End Credit

Question 29

Law that states: when prices increase, demand increases. Demand is centered on the consumer's behavior. Consumers will purchase less if the price is high.

Answer 29

Law of Demand

Question 30

Law that states: when prices increase, supply increases. Supply is centered on the supplier's behavior. Suppliers will sell more products if the price is high.

Answer 30

Law of Supply

Question 31

Occurs at the intersection of the demand curve and the supply curve. It is a balance between supply and demand, also called allocation efficiency

Answer 31

Equilibrium

Question 32

This occurs when the price or the quantity are not equal to the equilibrium

Answer 32

Disequilibrium

Question 33

The degree in which consumers change their demand and producers change their supply in response to changes in price or income

Answer 33

Elasticity

Question 34

Formula for Elasticity

Answer 34

% change in quantity / & change in price

Question 35

If the elasticity is _____ 1 (in relation to 1) the good or service is elastic. If the elasticity is ____ 1, the good or service is inelastic

Answer 35

greater than or equal to; less than

Question 36

When there are simultaneous shifts in supply and demand what do we know about one of the elements?

Answer 36

One of the elements cannot be determined

Question 37

What happens to the equilibrium price and quantity when both supply and demand are reduced?

Answer 37

price is indeterminate; quantity decreases

Question 38

What happens to the equilibrium price and quantity when both supply and demand increase?

Answer 38

price cannot be determined, quantity increases

Question 39

What happens to the equilibrium price and quantity when supply increases and demand decreases?

Answer 39

price decreases, quantity cannot be determined

Question 40

What happens to the equilibrium price and quantity when demand increases and supply decreases?

Answer 40

price increases, quantity cannot be determined

Question 41

Refers to a limited availability of goods and services. It occurs when people cannot obtain much of something they need. Often involves a trade-off because people must sacrifice resources/goods in order to obtain more of the scarce resources what they need or want

Answer 41

Cost scarcity

Question 42

The loss of potential gain from other alternatives when one alternative is chosen

Answer 42

Opportunity Cost

Question 43

The action or process of investing money for profit or material result

Answer 43

Investment

Question 44

The circumstances that make a person want to leave (their country/state)

Answer 44

Push factors

Question 45

The advantages a country has that make a person want to live there

Answer 45

Pull factors

Question 46

A crisis that started with a natural event that infected potato crops. The situation was further exacerbated by the government's laissez-faire economic policies and its continuation of exporting of food to Great Britain. Resulted in Irish immigrants coming to the US, causing a large increase in the Irish population in US cities

Answer 46

The Great Famile of Ireland/Potato Famine

Question 47

An official ban on trade or other commercial activity with a particular country

Answer 47

Embargo

Question 48

The right of a government or its agent to seize private property for public use, with payment of compensation

Answer 48

Eminent domain

Question 49

A threatened penalty for disobeying a law or rule

Answer 49

Sanction

Question 50

Monitoring including government regulation of unfair methods of competition and unfair or deceptive business acts/practices

Answer 50

Trade regulation

Question 51

The central banking system of the United States. Lends money to smaller banks and determines interest rates.

Answer 51

The Federal Reserve

Question 52

When the economy grows too fast, the Federal Reserve ______ interest rates

Answer 52

increases; in order to counteract borrowing

Question 53

When the economy slows down, the Federal Reserve ______ interest rates

Answer 53

lowers; in order to encourage borrowing

Question 54

What are the primary functions of the Federal Reserve?

Answer 54

To promote the health and stability of the US economy & financial system To conduct monetary policy expansionary= to stimulate economy contractionary= to abate the economy To supervise and regulate financial institutions and activities To promote a safe, efficient, and accessible settlement system for transactions To promote consumer protection and community development

Question 55

This department manages federal finances by collecting taxes, paying bills, and managing currency, govt. accounts, and public debt. It also enforces finance and tax laws.

Answer 55

The Department of the Treasury

Question 56

A tax or duty to be paid on a particular class of imports or exports

Answer 56

Tariff

Question 57

An official ban on trade with a specific country or commodity

Answer 57

Embargo

Question 58

When a country produces a good or service for a lower opportunity cost than other countries.

Answer 58

Comparative advantage

Question 59

When a country produces greater quantity of a good, product, or service than competitors using the same amount of resources.

Answer 59

Absolute advantage

Question 60

The original economic system in which traditions, customs, and beliefs shape the goods and services the economy produces

Answer 60

Traditional Economic System

Question 61

Economic system where the government determines what goods should be produced, how much to produce, and the price. This is also referred to as Communism. Example: North Korea.

Answer 61

Command Economic System

Question 62

Economic system where decisions regarding investment, production, and distribution are based on market, supply, and demand. Prices of goods are determined in a free price system. Example: Singapore.

Answer 62

(Free) Market Economic System

Question 63

Features characteristics of both socialist and capitalist economic systems

Answer 63

Mixed Economic System

Question 64

A branch of economics dealing with the performance, structure, behavior, and decision-making of regional, national, and global economics

Answer 64

Macroeconomics

Question 65

The total value of a country's output of all new goods and services produces in a year, both domestically and internationally.

Answer 65

National Income

Question 66

The value of the goods and services produced domestically in a year (in a country)

Answer 66

Gross Domestic Product (GDP)

Question 67

The amount of physical, mental, and social efffort used to produce goods and services in an economy

Answer 67

Labor

Question 68

A stable rate of unemployment- 1 to 2 percent of the total workforce

Answer 68

Full employment

Question 69

When skilled workers are working fewer hours than they would like to work or when the workers take lower paying jobs that do not require the skills or education the workers hold

Answer 69

Underemployment

Question 70

When people who are actively seeking work cannot find employment

Answer 70

Unemployment

Question 71

What are the three types of unemployment?

Answer 71

Frictional, Cyclical, and Structural

Question 72

Refers to difficulty in matching qualified workers with jobs

Answer 72

Frictional unemployment

Question 73

Refers to unemployment that is a product of the business cycle (i.e. tourist season ending)

Answer 73

Cyclical unemployment

Question 74

Refers to unemployment that occurs when workers are not qualified for the jobs that are available/skills workers possess become obsolete

Answer 74

Structural unemployment

Question 75

Indicates the economy's price level does not fluctuate much over a period of time, and there are no long periods of inflation or deflation

Answer 75

Price stability

Question 76

A rise in the general price level of goods and services in an economy over time, resulting in a decline in the value of money and purchasing power. Caused by the amount of dollars increasing relative to the number of goods and services.

Answer 76

Inflation

Question 77

A decrease in the general price level of goods and services over a longer period of time. Caused by the number of dollars falling relative to the number of goods and services.

Answer 77

Deflation

Question 78

The rate at which one currency will be exchanged for another. Also regarded as the value of one country's currency in relation to another country's currency.

Answer 78

Exchange Rate