Download Final Exam Study Guide

Final Exam Study Guide
Vocabulary
Pre-unit on Money
1. Money
2. Currency
3. Commodity Money
4. Representative Money
5. Fiat Money
Unit 1
1. Need
2. Want
3. Economics
4. Scarcity
5. Shortage
6. Land
7. Labor
8. Capital
9. Physical capital
10. Human capital
11. Guns or butter
12. Market
13. Competition
14. Invisible hand
15. Consumer
16. Socialism
17. Communism
18. Authoritarian
19. Laissez faire
Unit 2
1. Demand
2. Law of demand
3. Ceteris paribus
4. Demand curve
5. Normal good
6. Inferior good
7. Compliments
8. Substitutes
9. Inelastic
10. Elastic
11. Supply
12. Law of supply
13. Quantity supplied
14. Supply curve
15. Market supply curve
16. Elasticity of supply
17. Fixed costs
18. Variable costs
19. Total costs
20. Equilibrium
21. Disequilibrium
22. Excess demand
23. Excess supply
24. Price ceiling
25. Price floor
26. Perfect competition
27. Imperfect competition
28. Monopoly
Unit 3
1. Money supply
2. Liquidity
3. Default
4. Mortgage
5. Interest
6. Principal
7. Investment
8. Financial system
9. Financial asset
10. Financial intermediary
11. Mutual fund
12. Diversification
13. Portfolio
14. Return
15. Maturity
16. Yield
17. Capital market
18. Money market
19. Primary market
20. Secondary market
21. Share
22. Stockbroker
23. Brokerage firm
24. Tax base
25. Individual income tax
26. Sales tax
27. Property tax
28. Corporate income tax
29. Proportional tax
30. Progressive tax
31. Regressive tax
32. Fiscal policy
33. Federal budget
34. Expansionary policies
35. Contractionary policies
Unit 4
36. Gross domestic
product
37. Nominal GDP
38. Real GDP
39. Gross National Product
40. Business cycle
41. Expansion
42. Economic growth
43. Peak
44. Contraction
45. Trough
46. Recession
47. Depression
48. Capital deepening
49. Unemployment rate
50. Full employment
51. Underemployed
52. Inflation
53. Purchasing power
54. Consumer price index
55. Inflation rate
56. Deflation
57. Poverty threshold
58. Poverty rate
59. Absolute advantage
60. Comparative
advantage
61. Law of comparative
advantage
62. Export
63. Import
64. Development
65. Developed nation
66. Less developed nation
67. Per capita gross
domestic product
68. Industrialization
69. Subsistence agriculture
70. Literacy rate
71. Life expectancy
72. Infant mortality rate
73. Infrastructure
74. Population growth rate
75. United Nations
Development Program
(UNDP)
76. International
monetary fund (IMF)
Content Questions
Pre-unit on Money
1. What are the three uses of money?
Unit 1
1. What are the six characteristics of
money?
2. What is scarcity?
3. What are the three factors of production?
4. What is a trade-off and opportunity cost?
5. What does it mean to think at the margin
6. What are the three key economic
questions of what and how to produce
and who consumes?
Unit 2
1. What is the law of demand?
2. What is the difference between a change
in quantity demanded and a shift in the
demand curve?
3. What are the factors that affect elasticity?
4. What is the law of supply?
5. What is the relationship between
elasticity of supply and time?
6. What are the production costs of a firm?
7. What determinants cause changes in
supply?
8. How can governments influence the
supply of a good?
Unit 3
1. What are the functions of financial
institutions?
2. What are the services that a bank
provides?
3. What are the different types of
institutions?
4. How does investing contribute to the free
enterprise system?
5. How does the financial system help bring
borrowers and savers together?
6. What are the trade-offs of risk, liquidity,
and return?
7. What are the characteristics of bonds?
8. What other kinds of financial assets are
available?
Unit 4
1. Explain how gross domestic product is
calculated
2. Explain the difference between nominal
and real GDP
3. List the main limitation of GDP
4. Identify factors that influence GDP
5. Identify the phases of the business cycle
7. What are the characteristics of traditional
and market economies?
8. What are the disadvantages and
advantages of a free market?
9. What are the disadvantages and
advantages of a centrally planned
market?
9. How does supply and demand create
balance in the market place?
10. How do markets in equilibrium and
disequilibrium compare?
11. What effects do price ceilings and floors
have economically?
12. What are the four conditions that are in
place in a perfectly competitive market?
13. What is a monopoly? How are they
formed?
14. What does the government do to protect
competition?
9. What are the benefits and risks of buying
stock?
10. How does the government use taxes to
fund programs?
11. What are the different types of tax bases
and structures?
12. What are the characteristics of a good
tax?
13. Who bears the burden of the taxes in the
end?
14. How does the government use fiscal
policy as a tool for achieving its economic
goals?
6. Describe four key factors that keep the
business cycle going
7. Analyze how economic growth is
measured
8. Understand capital deepening and how it
contributes to economic growth
9. Analyze how saving and investment are
related to economic growth
10. Summarize the impact of population
growth, government, and foreign trade on
economic growth
11. Identify the causes and impact of
technological progress
12. Explain why full employment does not
mean that every workers is employed
13. Explain the effects of rising prices
14. Understand the use of price indexes to
compare changes in price over time
15. Identify the causes and effects of inflation
16. Define who is poor, according to
government standards
17. Describe the causes of poverty
18. Summarize government policies intended
to combat poverty
19. Explain the concepts of absolute and
comparative advantage and apply the
concept of comparative advantage to
explain why and how countries trade
20. Understand what is meant by developed
nations and less developed nations
21. Identify the tools used to measure levels
of development
22. Describe the characteristics of developed
nations and less developed nations
23. Understand how levels of development
are ranked
24. Identify the causes and effects of rapid
population growth
25. Describe the effects of the unequal
distribution of the factors of production
26. Understand the importance of human
capital to development
27. Analyze how political factors and debt are
obstacles to development
28. Understand the role investment plays in
development
29. Identify the purposes of foreign aid
30. Describe the functions of various
international economic institutions
Essential Questions/concepts
Pre-unit on Money
1. How does money make it easier to trade, borrow, save, invest, and compare the value of goods and
services?
Unit 1
1. How productive resources are limited, therefore people cannot have all the goods and services
they want; as a result, they must choose some things and give up others
2. Most choices involve doing a little more or a little less of something; few choices are all-or-nothing
decisions
3. People respond predictably to positive and negative incentives
Unit 2
1. Markets exist when buyers and sellers interact. This interaction determines market prices and
thereby allocates scarce goods and services.
2. Competition among sellers lower costs and prices, and encourages producers to produce more of
what consumers are willing and able to buy.
3. Governments sometimes have to intercede to control prices and firms
Unit 3
1. Investment promotes economic growth and contributes to a nation’s wealth. This system includes
savers, borrowers, institutions and government policies
2. Governments and corporations can save and make money through the trading and selling of bonds
3. Corporations and buyers both benefit from the stock market
4. Taxation generates revenue for local and federal governments.
5. The decisions a government makes about taxing and spending can have a powerful impact on the
overall economy
Unit 4
1. How do you measure economic performance in a country?
2. What are the factors that influence economic performance/growth?
3. How do countries interact with each other economically?