Download Flash Cards - Coweta County Schools

Flash Cards
Quiz #1
FRONT OF CARD
Scarcity
Opportunity cost
Allocation of resources
(the three economic questions)
Market economy
Command economy
Capitalism
Consumption
Investment
Specialization
Four factors of production
Simple interest
Compound interest
BACK OF CARD
Not enough resources to meet all individual
needs and wants
Value of the choice you gave up when you
made a decision
What do we produce?
How do we produce it?
For whom do we produce?
Private property rights
Voluntary exchange
Households and firms make economic
decisions
Government controls resources and makes
economic decisions
Mixed economy
Market system with some government
involvement
Spending on final goods and services for
personal use
Use of money to acquire capital goods and
grow the size of firms
Divide one large job into smaller parts
Improves efficiency
Example: Assembly line
Land
Labor
Capital
Entrepreneurs
Earns interest only on original principal
Example: treasury/corporate bonds
Earns interest on original principal plus
interest already earned
Example: savings account
Quiz #2
FRONT OF THE CARD
The law of demand
The law of supply
Price ceiling
Price floor
Elasticity
Functions of money
Sole proprietorship
Partnership
Corporation
Product market
Factor market
Perfect or pure competition
Monopolistic competition
Oligopoly
Monopoly
BACK OF THE CARD
Consumers demand a greater quantity at
lower prices than at higher prices
Price and quantity demanded are inversely
related
Producers supply a greater quantity at
higher prices than at lower prices
Price and quantity supplied are directly
related
Government sets the maximum price for a
good
Set below equilibrium
Causes shortages
Government sets the lowest possible price
for a good
Set above equilibrium
Causes surpluses
How much will supply or demand change
when price changes
Medium of exchange
Measure of value
Store of value
A firm with one owner/operator
Has unlimited liability
A firm with two or more owners/operators
Has unlimited liability
A firm owned by shareholders
Owners (shareholders) have limited
liability
Act of firms selling final goods and
services to consumers
Act of households selling resources to
firms
Many sellers of identical products—no
single firm can control the price
Example: agricultural products
Many sellers but products are not identical
Firms use product differentiation to
monopolize part of the market
A few large firms control a market
They are highly interdependent
Example: cereal, computers, tobacco
A single firm controls a given market
Output is lower, price is higher than it
should be
Quiz #3
FRONT OF THE CARD
Three measurements of the economy
Economic growth
Labor unions
Fractional reserve banking
US Federal Reserve
Monetary policy
To increase the money supply
(in a recession)
To reduce the money supply
( to prevent inflation)
GDP
CPI
Inflation
COLA
BACK OF THE CARD
Unemployment rate
Consumer price index (CPI)
Gross domestic product (CDP)
Rate of increase in GDP per capita
(per person)
Workers unite to negotiate as one in order
to increase wages and benefits
Collective bargaining
Banks take deposits, keep a fraction of it in
the vault and loan out most of the rest
Central Bank of the US
“The Fed”
Main job: control the supply of money
The actions taken by the Fed to increase or
reduce the money supply
Lower reserve requirements
Lower the discount rate
Buy Treasury securities (bonds)
Raise reserve requirements
Raise the discount rate
Sell Treasury securities (bonds)
Gross Domestic Product
Value of all goods/services produced w/n a
country’s borders over a given time
C + I + G + NX
Consumer Price Index
Most commonly used measure of inflation
A rise in the general level of prices
Helps: borrowers
Hurts: lenders, those on fixed incomes
Cost of living adjustment
When fixed incomes are increased annually
to allow for inflation
Quiz # 4
FRONT OF THE CARD
Fiscal policy
Expansionary fiscal policy
(used in a recession)
Deficit
Surplus
Frictional unemployment
Cyclical unemployment
Structural unemployment
Aggregate demand
Aggregate supply
National debt
Low interest rates cause
High interest rates cause
Productivity
BACK OF THE CARD
The government’s actions with tax rates
and spending
Reduce tax rates
Increase the level of government spending
When tax revenue is less than expenses
The amount must be borrowed
The national debt rises
When tax revenue is more than expenses
The national debt falls (in theory)
Looking for first job
In between jobs by choice
Lost your job due to a downturn in
business
An individual does not have the skills that
are in demand
The economy has changed such that the
person’s skills are obsolete
Demand for all goods, services, capital
goods in an economy
C + I + G + NX
Total capacity in a nation to produce goods
and services;
Availability of land, labor, capital,
entrepreneurs and productive technology
Total amount of money owed by the
government to bond holders
More borrowing by consumers and firms
The currency to depreciate
Less borrowing by consumers and firms
The currency to appreciate
How much production is accomplished per
worker
“output per input”
Quiz #5
FRONT OF THE CARD
Absolute advantage
Comparative advantage
Protectionism
Tariff
Quota
Subsidy
Free trade
Balance of trade
Trade surplus
Trade deficit
Balanced trade
Exchange rate
Strong currency
(currency has appreciated)
Weak currency
NAFTA
WTO
ASEAN
EU
BACK OF THE CARD
One country can produce more than
another country
One country can produce goods at a lower
opportunity cost than another country
Limiting international trade in order to
protect domestic firms and jobs
Tax on imports
imports go down and price rises
Legal limit on the number of goods
imported
Imports go down and price rises
A government payment to its firms to make
them more competitive with foreign firms
International trade that is carried on with
little if any trade restrictions
Exports minus imports
Exports > imports
Positive balance of trade
Imports > exports
Negative balance of trade
Exports = imports
Rate at which one currency can be
exchanged for another
Example: $1 = 13 pesos
Imports go up and Exports go down
Domestic goods are expensive to foreigners
Foreign goods are cheap to domestic
consumers
Imports go down and Exports go up
Domestic goods are cheap to foreigners
Foreign goods are expensive to domestic
consumers
North American Free Trade Agreement
Free trade agreement between Can, US,
Mex
World Trade Organization
Monitors free trade agreements between
nations
Association of Southeastern Asian Nations
European Union
Quiz #6
FRONT OF THE CARD
Human capital
Savings accounts
CD
Treasury bonds
Mutual funds
Stocks
Junk bonds
Dividends
Progressive tax
Regressive tax
Collateral
Mortgage
Delinquency
Default
Outstanding debt
BACK OF THE CARD
Knowledge about production
Education improves human capital
Bank accounts that earn compound interest
and are FDIC insured
Certificate of deposit
Timed deposit FDIC insured
Government IOUs
Pay simple interest payments twice
annually
Pools of stocks not FDIC insured
Units of ownership in a corporation not
FDIC insured
Bonds issued by firms with shaky credit
ratings
Amount of profit paid to shareholders per
share per year
Tax rates go up as income goes up to
extract revenue from high wage earners
Example: income tax
Tax burden is higher on lower incomes
than on higher incomes
Example: Social Security and Medicare
Property that guarantees repayment of a
loan
Loan for the purchase of a home
Being behind on loan payments
Refusal or inability to repay a loan
Total amount of debt still owed to a lender
Quiz #7
FRONT OF THE CARD
Insurance
Premium
Deductible
Life insurance
Beneficiary
Disability insurance
Homeowner’s insurance
Health insurance
Auto insurance
Commodity money
Fiat money
Private sector
Public sector
BACK OF THE CARD
Tool used to protect against loss or damage
Monthly payment to an insurance company
Amount you must pay when you file an
insurance claim
Pays a beneficiary in the event of
unanticipated death of the insured
The person you designate as the recipient
of a life insurance payment
Pays you an income in the event of an
illness or accident that prevents you from
working
Pays for repairs and rebuilding if a home is
damages or destroyed
Covers medical expenses
Pays for repairs to damaged cars
Money that has some kind of value in itself
Examples: gold, cigarettes
Money that has no value in itself, is only
valuable because the government say it is
All non-government business activity
Anyone who does not work directly for the
government
All government related business activity
Anyone who works directly for the
government
Quiz # 8
FRONT OF THE CARD
Fixed costs
Variable costs
Recession
Profit
Equilibrium
Incentive
Disincentive
Averse
Deter
Capital goods
Efficiency
Public goods
BACK OF THE CARD
Costs that do not change with levels of
production
Example: rent or lease payments
Costs that do change with levels of
production
Example: wages
A drop in business activity or fall in
aggregate demand
GDP shrinks
The pay off an entrepreneur seeks when
s/he goes into business
Price at which quantity supplied = quantity
demanded
Something that motivates a certain
behavior
Something that motivates you not to do
something
Dislike of or desire to avoid
To discourage
Goods used to produce other goods
Getting the most production/benefit for the
lowest cost
Goods provided by the government for the
population’s use
Example: roads, street lights