Midterm Flashcards
(227 cards)
1
Q
The study of how people seek to satisfy their needs and wants by making choices
A
Economics
2
Q
Air, food, water, shelter
A
Need
3
Q
Something we desire
A
Want
4
Q
Actions or activities
A
Services
5
Q
Physical objects
A
Goods
6
Q
Knowledge and skills a worker gains through education and experience
A
Human capital
7
Q
Effort that a person devoted to a task for pay
A
Labor
8
Q
Producers will not or cannot offer other goods or services at the current price
A
Shortage
9
Q
Limited quantities of resources to meet unlimited wants
A
Scarcity
10
Q
Human-made resources that is used to produce other goods and services
A
Physical capital
11
Q
All natural resources used to produce goods and services
A
Land
12
Q
Land, labor, and capital
A
Factors of production
13
Q
Human-made objects used to create other goods and services
A
Capital
14
Q
Ambitious leaders who decide how to combine land, labor, and capital resources to create new goods and services
A
Entrepreneur
15
Q
Which of the following is not considered a NEED according to your book ?
A
A nice car
16
Q
WhicH of the following is a WANT a cording to your book ?
A
A nice car
17
Q
Which of the following is not considered a country’s resources ?
A
Air
18
Q
Cost always refers to money
A
False
19
Q
Economies may operate ineffectively
A
True
20
Q
A production possibilities curve shows alternative ways to USA an economy’s productive resources
A
True
21
Q
Thinking in the margins is only about thinking how much more you can do
A
False
22
Q
In your own words, define economics
A
Our choices and mindset alters our wants and needs
23
Q
In your own words, define wants and needs
A
Wants- live without
Needs- can’t live without
24
Q
In your own words, describe trade-offs
A
Choosing one option over another for a different outcome
25
If there is a large supply and low demand, prices would typically
Fall
26
If there is a short supply and high demand, prices would typically
Rise
27
A shortage is always permanent
No
28
Economics is the study of
Scarcity
29
Scarcity means something is temporarily unavailable
No
30
If IBM issues a bond and you buy their bonds, you own part of the company
No
31
If you buy IBM stock, you own part of the company
Yes
32
If you start saving for retirement now, you have a better chance of hitting your retirement goals then if you wanted to save until you were 40
Yes
33
A bill from your doctor
Expense
34
Your car
Assets
35
Car loan
Liabilities
36
Your paycheck
Income
37
A social and political philosophy based on the belief that democratic means should be used to distribute wealth evenly throughout a society is called
Socialism
38
Economic systems that are based on voluntary exchanges in markets are called ___________ __________ Economics
Free market
39
What is the most common reason someone starts their own business ?
Freedom
40
America is considered a Land of _______ because of our Free Enterprise
Opportunity
41
If you have a successful business, can the government of the U.S. take over control to run it for themselves without due process ?
No
42
What is Macroeconomics ?
The study of the behaviors and decision making of entire Economics
43
What is Microeconomics ?
The study of the behavior and decision making small units as small units, such as individuals, families, and businesses
44
What does GDP stand for ?
Gross Domestic Product
45
The study of economics begins with the idea that people cannot have everything they ___________ or _________
Need
| Want
46
A ________ is something like air, food, or shelter
Need
47
A _________ is just about everything else
Want
48
We discussed two types of capital, _____________ and __________
Physical
| Human
49
Human-made objects used to create other goods and services are called __________ capital
Physical
50
____________ capital is the knowledge and skills a worker gains through education and experience
Human
51
As discussed in class, nobody can take away your _________ or ____________
Education
| Experience
52
Ambitious leaders who decide how to combine land, labor, and capital resources to create new goods and services are called __________
Entrepreneurs
53
___________-__________ are all the alternatives which we give up whenever we choose one course of action over another
Trade-off
54
The most desirable alternative given up as the result of a decision is called the _________ cost
Opportunity
55
For most decisions there are pros and cons. In economic terms we should do a ___________ / ___________ analysis
Cost
| Benefit
56
Costs are financial
False
57
Which of the following usually gives the most protection to an individual
Incorporation
58
LLC stands for
Limited liabilities corporation
59
Does LLC typically issue stock and bonds ?
No
60
Why do nations trade ?
Lacking in resources, higher in profit
61
Define opportunity cost
The most desirable alternative given up as a result of a decision
62
What is an export ?
Putting out goods to other countries
63
What is an import ?
Something we get from other countries
64
What country is the largest importer ?
United States
65
What country is the largest exporter ?
United States
66
What are the thee most common trade barriers ?
Import quotes
Voluntary export restraint (VER)
Tariffs
67
Define tariffs
Tax on imported goods
68
What is a trade war ?
Escalating trade barriers
69
Define protectionism
When the nations protect the resources that is being traded
70
Does the US have a trade surplus or trade deficit ?
Trade deficit
71
Why are we in a trade war with China ?
Exporting to many goods at cheaper prices
72
Air, food, water, shelter, are examples of
Need
73
Something we desire is an example of
Want
74
The study of how people seek to satisfy their needs and wants by making choices
Economics
75
Producers will not offer goods or services at the current price
Shortage
76
Limited quantities of resources to meet unlimited wants
Scarcity
77
Human-made resource that is used to produce other goods and services ____________ capital
Physical
78
Ambitious leaders who decide how to combine land, labor, and capital resources to create new goods and services
Entrepreneurs
79
Define "cost" as taught in class
Something we end up losing in a situation
80
Define opportunity cost
The most desirable alternative given up as the result of a decision
81
Define trade-offs
Sow thing we give up in making a decision
82
Give an example of a trade-off
In class, Kery was offered $20 but he would have to get expelled but is he didn't want that he'll give it up
83
What is the difference between an LLC and a Sole-proprietor ?
LLC- deal with smaller businesses
| Sole-Proprietor- all liabilities
84
What keeps a manufacturer from charging way too much for an item ?
Competition
85
Define incentive
Motivation
| Something you get out of a situation
86
Define profit
How much the item is
87
Define communism
Government control
88
Define Laissez Faire
The doctrine that states that government generally should not intervene in the marketplace
89
Define private property
Property that is owned by the individuals or companies, not by the government of the people as a whole
90
How does welfare attempt to raise poor people's standard of living ?
It doesn't raise it up, welfare helps the people
91
Why does poverty exist in a free market economy ?
People can choose to make their own money
92
What is the difference between cash transfers and in-kind benefits ?
Cash transfers- direct payments of money to eligible poor people
In-kind benefits- goods and services provided for the free or at greatly reduced prices
93
How is Social Security an example of income redistribution ?
By taking a small amount of earned income and storing over time
94
What constitutional guarantees underlie the American free enterprise system ?
The Bill of Rights to the United States
95
Why have some nations begun a transition to free enterprise ?
The people want control what goes on in the market place instead of government choosing for them
96
Define Tariff
A tax on imported goods
97
What are the three trade barriers we discussed in class ? List each one and define
Import quotas- a limit on the amount of a good that can be imported
VER- limited exports to a specific country
Tariffs- a tax on imported goods
98
What is a trade imbalance ?
When a nation puts out so much product, but brings a smaller amounts of imports (vise versa)
99
Define "Fracking"
A light crude, oil you take out of the ground with machines
100
Why did Fracking become affordable ?
Gas prices rose
101
In a free market economy you have periods of ___________ and _________
Surplus
| Deficit
102
Name three reasons for import Quotas
Protect U.S. manufacturing
Protect consumers
Protect prices
103
When unemployment is below 4%-5% it is effectively considered what ?
Full employment
104
Name three things that may cause inflation
Devaluing currency
A shortage
Slow economy
105
Are we on the Gold Standard or on the Floating Exchange Rate (Floating Dollar) ?
Floating Dollar
106
Define Money Manipulation
Devaluing a currency on purpose to get around the tariff
107
Why might a country devalue their currency ?
Increase domestic spending
Slow down economy
Get around tariffs
108
Benefit of devaluing a country's currency
Increasing exports
| Increasing domestic spending
109
Costs for devaluing a country's currency
Slow economy
Increasing unemployment rate
Increasing debt payment
Inflation
110
What is the name of Chinese currency ?
Yuan
111
Which of the following is not a possible long-term negative impact on a nation's economy if they devalue their currency ?
Lower debt payments
112
Which of the following is a short-term positive impact on a nation's economy if they devalue their currency
Increased domestic spending on domestic goods
113
What are three positive things that may happen after a natural disaster ?
Short-term employ employment rate
Government aid
Money from the government
114
What are three negative things that may happen during/after a natural disaster ?
Business close
Unemployment rate goes up
Loss of assists
115
Define shareholder
A owner of stock
116
Define shareholder
A person of interest or concern with something, especially a business
117
How might our government reduce spending ?
Military spending
| Infrastructure
118
How might our government increase income ?
Tariffs
| Taxes
119
Does a company have a moral or ethical obligation to make sure their suppliers do not use slave/child labor ?
In my opinion, I believe they do
120
Name three ways a Wal-Mart type of store may hurts local economy
Has other stores going out of business
Keep paying at a cheaper price
Taking more products from other companies
121
Name three ways a Wal-Mart type of store may help a local economy
It's well know
Get jobs
Cheaper prices
122
Why do we have issues today with China as a trade partner ? Name three things
Devalue currency
To much import
Steal technology from us
123
Whose interest does a business have as their top priority ?
Shareholders
124
Do most countries carry external debt ?
Yes
125
What is the desired outcome of our trade war with China ?
We will have more of a trade imbalance
126
What does GDP stand for ?
Gross domestic product
127
GDP is the, "dollar value of all final ___________ and _________ produced within a country's borders in a given year.
Goods and services
128
Does GDP include intermediate goods ?
No
129
What are intermediate goods ?
Goods and services to make the final product
130
Would GDP include cars made in Ohio by a company owned by a Japanese company ?
Yes
131
Would GDP include cars made in Brazil by an American owned company ?
No
132
Your neighbor brought a brand new house in 2010. He was transferred to a new job in Georgia so he sold his house last week. Would this be included in the US GDP for this year ?
No
133
In the above scenario, would the fee paid to the real estate agent who handled the resale of the house last week be counted in this year's GDP ?
Yes
134
You hired a contractor to build a new home for you today. Would the lumber, nails, shingles, windows, and doors be included in this year's GDP ?
No
135
In question 8, would the sale of the home be included in this year's GDP ?
Yes
136
When comparing the "Expenditure Approach" and the "Income Approach" for figuring out the GDP, should they give us the same total or very differs totals ?
Same
137
Of the following, circle all of the durable goods
```
Stove
Car
Refrigerator
Play Station
Computers
Lazy Boy Chair
```
138
Of the following, circle all of the non-durable goods
Blue jeans
Green beans
Air Jordan's
139
Does measuring the GDP help determine how well the economy is doing ?
Yes
140
What are the four phases of a business cycle ?
Expansion
Peak
Contraction
Trough
141
An economy is said to be in a recession when GDP falls for how many consecutive quarters ?
2 quarters
142
Does rising unemployment typically happen during periods of recession ?
Yes
143
Does rising interest rates cause job growth to shrink or expand ?
Shrink
144
The price paid for the use of borrowed money
Interest
145
A paper currency issued during the Civil war
Greenback
146
The ability to be used as, or directly converted into, cash
Liquidity
147
Money in a checking account that can be paid out "on demand"
Demand deposit
148
Objects that have value because the government has decreed that they are an acceptable means to pay debts
Fiat money
149
Failing to pay back a loan
Default
150
An institution for receiving, keeping, and lending money
Bank
151
A card used to withdraw money from a bank account
Debt card
152
Coins and paper bills used as money
Currency
153
A widespread panic in which many people try to redeem their paper money at the same time
Bank run
154
A monetary system in which paper money and coins had the value of certain amounts of gold
Gold standard
155
The seizure of property from the borrowers who don't repay their loans
Foreclosure
156
A banking system that keeps only a fraction of its funds on hand and lends out the remainder
Fractional Reserve Banking
157
A bank that belongs to the Federal Reserve System
Member bank
158
The direct exchange of one set of goods or services for another
Barter
159
All the money available in the US economy
Money supply
160
A bank that can lend to other banks in time of need
Central bank
161
A specific type of loan that is used to buy real estate
Mortgage
162
The amount of money borrowed
Principle
163
Anything that serves as a medium of exchange, a unit of account, and a store of value
Money
164
A card entitling its owner to buy goods and services based on the owner's promise to pay for those goods and services
Credit card
165
A person or institution to whom money is owed
Creditor
166
Before we were on the "Floating Dollar" the U.S. had its money backed by what valuable item ?
Gold
167
When a country devalues its currency, do they typically see an increase or decrease in exports ?
Increase
168
When a country devalues its currency, will their economy typically slow or grow in the long term ?
Slow
169
What is the difference we discussed in class between a Charge Card (like American Express) and Visa card ?
Charge card is 100% payed off monthly
| Visa card is when you have to pay back the interest
170
Money held in a checking account is considered M1 or M2 ?
M1
171
Money held in a savings account is considered M1 or M2 ?
M2
172
What is the real estate appraisal ?
Estimation of value of the property
173
If you were approved for a secured loan, you may have to give some kind of collateral. What is collateral ?
Something you can secure a loan
174
If you default on a secured loan, they may ________ your collateral
Repossess
175
What is P and I ?
Principle
| Interest
176
If GDP decreases for _____________ consecutive months, it is called a __________
Six
| Recession
177
If your bank need a temporary loan, they would get that loan from the ____________ Bank
Central
178
If Rason's Smelly Shoe Company had a record year in sales. Name three things we discussed in class they may do with their profits
Expansion
More employees
More product
179
_______________ is king (Economically speaking)
Cash
180
The greater the Risk the greater the potential
Reward
181
If you have lack of cash to pay your bills, you are cash
Poor
182
The Federal Reserve Bank is also known as the
The Fed
183
Who issues credit cards ?
Banks
184
When you use a Visa debit card, do you pay a bill at the end of the month or do funds automatically come out of your checking account at the time of the transaction ?
Funds automatically come out of your checking account at the time of the transaction
185
Is M1 money considered Liquid Assets or Fixed Assets ?
Liquid assets
186
Which typically has higher interest Checking accounts or Savings accounts ?
Savings
187
Checking accounts are considered
Demand accounts
188
Name a savings instrument that can be either short or long term, that earns interest, that's has a penalty if you pull money out before its maturity date, and which typically locks in an interest rate
CD
189
If you knowingly write checks without having the funds in the account, you may be guilty of
Check fraud
190
If Ashley's Lip Balm Company had a terrible year in sales p, name three things we discussed in class they may do with their profits
You can't expand
Start dropping employees
Can't make more product
191
When comparing the "Expenditure Appeoach" and the "Income Aproach" for figuring out the GDP, what percentage differences would you expect to find ?
0%
192
Name three things which we might come to expect during a recession
Stop buying producers
Lose consumers
Going out of business
193
When a country devalues its currency, do they typically see an increase or decrease in imports ?
Decrease
194
Our banks are part of the Fractional-Reserve Banking system meaning that they don't hold all of your money in their values, instead they loan it out. However, they are required to keep a certain amount in their vault or on deposit with the Central Bank. What is the term for this amount ?
Reserve ratio
195
OMB is the ____________ of ____________ and ______________
Office of management and budget
196
What branch of government does the OMB fall under ?
Executive
197
If revenues are equal to spending, it means we have a ___________ budget
Balance
198
A plan for the federal government's revenues and spending for the coming year is called the Federal __________
Budget
199
When does the Fiscal Year begin for the U.S. Government ?
Oct 1
200
What branch typically does the first draft of the budget ?
Executive
201
From there it goes to
House of Representatives
202
If the government wants to spend more then it has budgeted revenue, it must get more money. It can do this in the two ways. Name them:
Taxes
| Bonds
203
If the government takes in more than it spends it means we have a budget
Surplus
204
If the government takes in less than it spends, it means we have a budget
Deficit
205
If the government wants to increase spending and lower taxes, it must take on more
Debt
206
If the government wants to decrease spending and lower taxes to encourage economic growth, this would be called an _______________ policy
Expansionary
207
If the government wants to decrease spending and increase taxes, this would be called a __________________ policy
Contractionary
208
When in a budget deficit, the government takes on debt. How ?
The government will typically issues bonds they will have to pay back
209
Name one of the debt instruments. T-
Treasury bill
210
Name another. T-
Treasury bond
211
Name the third. T-
Treasury note
212
Explain the political issues involved worth increasing spending on social programs without raising taxes or talking on more debt
The government would have to pay less on defense and would have to let go on some military
213
With every dollar change in fiscal policy, whether it is an increase in spending or a decrease in taxes, it creates a greater than one dollar change in the national income. This is called the _________________ Effect
Multiplier
214
Treasury Bills are repaid within ____________ years
3 months - 1 years
215
Treasury Bonds are repaid within ________ years
30
216
Treasury Notes are repaid within __________ years
2-10
217
If you are an investor and want to buy U.S. Government Bonds and you believe that interest rates will go up in the near future, which treasury debt instrument would you buy ?
Bill
218
If you are an investor and want to buy U.S. Government Bonds and you believe that long term interest rates are only going to go down, which treasury debt instrument would you buy ?
Bonds
219
When the U.S. Government issues bonds, what effect does that have on future Federal Budget ?
The Federal Budget now has to include he new debt from the bonds
220
If the government wants to slow the economy because of the fear of inflation, would it write an expansionary or contractionary budget ?
Contractionary
221
We did not discuss in class yet, but your book discusses a way to respond to a budget deficit by creating money. If left unchecked, we could see hyperinflation. Define hyperinflation
A very high inflation
222
For FY 2019, the federal budget is estimated to be $4.407 trillion. The estimated revenue will be $3.422. The leaves $985 billion shortfall. That shortfall is called a budget
Deficit
223
For FY 2019, interest on the national debt is $363 billion. How does this effect the Federal Budget and why will this amount only get worse if we continue to run a deficit ?
It will effect the Federal Budget because it's adding more money then the set that year and it's taking more in then it should
224
If interest payments on the national debt continue to rise, name three ways we will be forced to service it
Decrease infrastructure
Decreasing military spending
Increase taxes
225
Debt is normal for a government, but serving that diet can get out of control. If you worked for the OMB, what would you do to decrease out national without creating hyperinflation, unemployment, or a recession ?
Would cut down on budget
226
Right now in the world there is surplus oil. This has caused the price per barrel to
Decrease
227
OPEC is discussing cutting output of oil. If they do,what effect will this have on global oil prices ?
Increase
