Download Economics Final Exam Study Guide Unit 1: Economic Decision

Economics Final Exam Study Guide
Unit 1: Economic Decision Making
1. What is the opportunity cost of a decision?
2. What is scarcity?
3. Why does every decision involve trade-offs?
4. What is “thinking at the margin”?
5. What id physical capital? Give an example.
6. What is human capital? Give an example.
7. What is economic interdependence? How does a circular flow chart illustrate this concept?
Unit 2: Economic Systems
8. What are the three basic economic questions?
9. Define traditional economy. Where is a traditional economy usually found?
10. Define market/free-market economy. (a.k.a., laissez-faire, capitalism)
11. Define command economy. (a.k.a, communism, socialism)
12. How is the United States and example of mixed economy that is market-oriented?
13. What is specialization? How does it benefit an economy?
14. Define sole proprietorship. What are its benefits compared to other forms of business organization?
15. Define partnership. What are its benefits compared to other forms of business organization?
16. Define corporation. What are its benefits compared to other forms of business organization?
17. What is a dividend?
18. What are the goals of a labor union?
Unit 3: Money
19. Why is money more efficient than barter?
20. Why is portability an important characteristic of money?
21. How do banks create money?
22. What is the relationship between interest rates and the demand for loans?
23. What is the purpose of the FDIC?
Unit 4: Macroeconomics (measuring the whole economy)
24. How is unemployment calculated? Who is counted in the labor force? Who is NOT counted?
25. What is GDP? How is it calculated?
26. What causes aggregate demand to go up?
27. What happens to unemplo9yment when the economy slows? Why?
28. What is underemployment?
29. What is full employment?
30. What causes inflation?
Unit 5: Role of the Government in the U.S. Economy
31. What is a public good? Why does the government provide public goods and services?
32. What is an example of a direct assistance program?
33. Why does the government sometimes use expansionary fiscal policy?
34. How can the Federal Reserve encourage banks to lend more money? In what economic situation
would they do this?
Unit 6: Personal Finance
35. What is the difference between a debit card and credit card?
36. What is the best way to build your credit while avoiding debt?
37. What is the difference between saving and investing?
38. What is the difference between simple and compound interest?
39. What is a mutual fund and what advantage does it have over stocks and bonds?
40. How old do you have to be to use a credit card in the U.S.?
41. Why is the federal income tax called a “progressive” tax?
42. What is the deadline to file a federal income tax return?
43. What is a W-2?