Download Test Help 1 1. You needs and wants never end 2. Products and

Test Help 1
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You needs and wants never end
Products and money used in the production of goods and services are called capital resources
The mismatch of unlimited wants and needs and limited economic resources is called the basic economic
problem
The first step in the economic decision-making process is to define the problem
The United States could best be characterized as a capitalistic economy.
The right of private property means you can own, use, or dispose of things of value
In a market economy, buying decisions are made by consumers
If heavy competition for a product keeps its price low, businesses will NOT be very motivated to offer the
product for sale
If many consumers want a particular service, it’s price will probably go up
It’s not always true that the higher the price, the high the producer’s profits because a lot of factors go
into profit margins
Fine jewelry is not a need but a want
The means through which goods and services are produced are called economic resources
Employees would not be a capital resource but a human resource
The value of the next-best alternative that you did not choose is called opportunity cost
When a country decides to focus on advanced technology and skilled labor force, it is primarily answering
the basic economic question “How to produce?”
Personal economic freedom is most limited in a command economy
Government ownership of resources is not a characteristic of a capitalistic economy
Businesses, individuals, and governments are all examples of consumers
The quantity of a good or service that consumers are willing and able to buy is called demand
Customers seeing a number of products they believe will satisfy a need is a situation where demand will
likely reduce.
Things that add comfort and pleasure to your life are wants
People producing goods and services are human resources
Things that are required in order to live are needs
Things that you can see and touch are goods
When you give up something to have something else it’s a tradeoff
Those who determine which products and services will be available for sale are producers
Raw materials supplied by nature are natural resources
Not having enough resources to satisfy every need is scarcity
Things that are intangible and have no physical characteristics are services
Those who buy and use goods and services are consumers
Only final goods is counted when GDP is measured
The main cause of unemployment is reduced demand for the goods and services being provided by
various workers
If wages increase faster than gains in productivity, the cost of producing goods increase and prices rise
Even though some nations have such abundant resources, they can sometimes experience economic bad
times.
The last depression in the United States occurred during the 1930s
Inflation can sometimes occur when the demand for goods and services is greater than the supply
37. People with poor credit ratings pay a higher interest rate to borrow money than people with good credit
ratings.
38. In the United States, the personal savings rate is rather low.
39. When you buy a corporate bond, you have lent money to the company
40. Even a well-run business needs to borrow money from time to time.
41. Any service or good that is not a finished good would not be included in the GDP
42. An increase in GDP per captia means that an economy is growing
43. In the US, the labor force consists of all people above age 16 who are actively working or seeking work.
44. A period of economic recovery is characterized by a rise in GDP
45. Inflation can sometimes stimulate economic activity if it is kept relatively low.
46. The interest rate financial institutions are charged to borrow funds from Federal Reserve Banks is called
the discount rate
47. The money for capital projects usually comes from personal savings, stock investments, and bonds.
48. Corporations sell stock.
49. People who buy bonds are called creditors
50. The total amount owed by the federal government is called the national debt
51. Prosperity is a period in the business cycle when most people who want to work are working, wages are
good, and GDP growth increases
52. Productivity is the production output in relation to a unit of input
53. Depression is a period in the business cycle marked by a long period of high unemployment, weak
consumer sales, and business failures
54. Inflation is an increase in the general level of prices
55. The portion of people in the labor force who are not working is the unemployment rate
56. Stock represents debt for an organization
57. Personal income are salaries and wages as well as investment income and government payments to
individuals
58. A recession is a period in the business cycle when demand begins to decrease, unemployment begins to
rise, and GDP growth slows for at least two quarters in a calendar year
59. Bonds represent debt for an organization
60. Deflation is a decrease in the general level of prices