Economics, Unit 1
7) Select FIVE characteristics of a command economy.
- There is a totalitarian form of government. - there is limited availability of goods. - The government makes all economic decisions. - There is no private property or private business. - There is equal distribution of wealth.
8) Describe Karl Marx and Friedrich Engels' THREE main points in the Communist Manifesto.
- World history is defined by class struggle. - Capitalism features exploitation of workers (proletariat) by the owners. - There are inherent flaws in capitalism.
5) Select THREE causes of the Great Depression.
- surplus of agricultural goods leading to lower prices - higher tariffs - poor use of credit
Q1) What country owns a large portion of U.S. debt?
China
4) Which example illustrates opportunity cost?
Daniel has $20. He is considering whether to spend it on movie tickets or a book he wants to read.
5) __________ detailed the flaws of capitalism and how it could eventually end with a worker operated government with no social classes.
Das Kapital
Q2) ______ attempted to explain how capitalism could end in a worker-operated government without social classes.
Das Kapital
Q3) Which was one of the first three departments of the early American government?
Department of State
5) Which organization does NOT work for consumers?
Federal Treasury
11) How did Alexander Hamilton justify his argument for a national bank?
Hamilton stated that since the government was responsible for taxes and tariffs, it needed a place to keep the money. Therefore, he reasoned that the Elastic Clause gave the government the power to create a national bank.
Q1) What aspect of government spending recently increased greatly in the spring of 2010?
Healthcare spending
Recession
a decline in a country's economy and GDP; in the United States, a time when there is a straight decline for six months or two quarters
Q1) Which purchase requires good credit?
a house
depression
a long and severe form of a recession
business cycle
a series of economic expansions and contractions
Traditional Economic System
a system under which people within a community perform the same economic functions as their forefathers and ancestors ____________.
tariff
a tax on imported goods
tax
any measure of collecting revenue by the government from the people to help pay for various services or government actions
Subsistence farming
farming that is done simply to feed the family of the grower and not to sell goods for a profit
Q1) Which portion of U.S. government spending took up the largest percentage of the 2016 budget?
healthcare
12) What is the goal of a mixed economic system?
prevent the abuses and shortcomings of both the command and market systems
Q2) The French word for a member of the working class is _________.
proletariat
Q1) In 1962, President John F. Kennedy made a speech in which he spelled out the rights that a consumer has when purchasing something. Which one of these rights was NOT included in Mr. Kennedy's speech?
right to redress
Q2) The idea of _______ is that both the buyer and seller will do what is right in order to maintain a trading relationship.
self-interest
3) For how long must a country's economy and GDP decline in order for the country to be considered to be in a recession?
six months
Q3) In 1837, President Andrew Jackson caused a depression for Martin Van Buren during his fight with ______.
the Bank of the United States
Q3) Which war and the subsequent agricultural surplus helped cause the 1857 depression?
the Crimean War
Q2) Concepts of the market economic system stem from which movement?
the Enlightenment
9) The Department of _______ is responsible for the making of money or the collection of it through taxes by the U.S. government.
the Treasury
Q2) The inventors of the mixed economic system, chief among whom was R.H. Tawney,came from _______.
the United Kingdom
Q2) The concept of a double coincidence of wants is the instrumental part of _______.
the barter system
Debt
the charge a lender places on borrowed money; A lender assesses the interest as a percentage of the money owed.
Interest
the charge a lender places on borrowed money; A lender assesses the interest as a percentage of the money owed.
market
the collective consumers within a country
Opportunity cost
the cost associated with giving up something in order to get something else; Balancing the costs and benefits is a major factor in economic decisions.
Barter System
the trading of one item to receive another item; creates a double coincidence of wants
1) Choose True or False. _______ Bartering is a method of acquiring goods through trading that is typical of traditional economies. ________ Bartering is made easier through a double coincidence of wants. ________ Afghanistan has a traditional economic system. ______ Growing crops for profit is known as subsistence farming.
true false true false
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Q3) What was NOT a part of Hamilton's economic plan?
creation of a new set of bank notes
Q3) An economy going from the trough to the peak is said to be in a state of _______.
expansion
7) In 2015, how much debt did the U.S. government have?
$14 trillion
2) Select the four rights of a consumer.
- right to choose - right to be heard - right to be informed - right to saftey
Q1) What is the purpose of interest?
It allows the lender to make money in exchange for giving money to those who need it.
4) _______ is the problem that arises due to limited resources and unlimited wants.
Scarcity
3) Alexander Hamilton was the first ______.
Secretary of the Treasury
Q2) What is the importance of Karl Marx and Friedrich Engels?
They preached the idea that capitalism was inherently flawed and that society will only improve when the workers take control of the economy.
6) ______ was one of the leading opponents to Alexander Hamilton's request for a national bank.
Thomas Jefferson
commerce
conducting of business
Q1) Which decision is NOT one made with an economic perspective?
A young man buys an old car without thinking about the costs associated with fixing the vehicle, and the fact that it will probably only last for months.
6) Which of these scenarios best represents a traditional economic system?
An Amish family sells the furniture they have made for generations.
5) Which company would add to the GDP of the United States?
An Indian company produces electronic devices at a factory in California.
Q1) The ______ is an organization that works to protect consumers.
Better Business Bureau
10) The _______, also known as the Necessary and Proper Clause, is a portion of the U.S. Constitution that allows the federal government to pass laws to assist in carrying out its duties.
Elastic Clause
6) Which government agency deals most directly with consumers in how it protects their rights?
Federal Trade Commission
7) _______ means taking in old bonds and reissuing them at full value.
Funding at par
10) What is a criticism of the market economy?
It does not promote fairness or take care of those who have difficulties succeeding within the system.
1) The ______ is an independent and private organization that tracks the actions of the business cycle.
National Bureau of Economic Research
3) What was the effect of the Specie Circular policy?
Paper currency lost value.
Q3) The depression of 1893 was directly responsible for the growing popularity of the _____ Party.
Populist
Q2) _______ is the primary motivating factor in a market economic system.
Profit
4) _______ was an economic historian who heavily influenced the British Labour Party after World War I to move the country towards a mixed economy.
R.H. Tawney
5) The collapse of ________ greatly altered U.S. military spending.
Russia
Q1) Which country's collapse greatly altered U.S. military spending?
Russia
Q1) Choose if the statement concerns Economic perspective or if it concerns Scarcity. _____ A rise in the price of groceries results in consumers spending less on entertainment. _____ A woman reviews her budget, debt, and spending habits when considering whether to purchase a home. ____ Many parents are unable to find and purchase a popular toy at Christmastime.
Scarcity Economic perspective Scarcity
Q1) Credit refers to _________.
a consumer's record of going into and getting out of debt in a faithful and punctual way
Credit
a consumer, company, or government's history in paying back their debt or fulfilling their financial obligations
hard currency
a form of currency such as gold or silver that is more durable than paper currency
constitutional convention
a meeting to create a new constitution
economic perspective
a method of making economic decisions by first weighing the benefits and costs associated with each measure
inflation
a rise in price due to the currency's lower value
Q3) The lowest period for a country's GDP is called _______.
a trough
Q3) One of the major causes of the economic downturn of 1819 was _______.
a wave of overspeculation in the Western frontier territories
Q2) The federal government was weakened under the Articles of Confederation, so the Congress did not have the power to _______.
collect taxes and regulate commerce
8) Use the Comparison of Economic Systems chart to choose the best answers. Which system provides little chance to succeed or gain wealth?
command
3) What is perhaps the most important responsibility that consumers have?
educating themselves on products before making a buying decision
Q2) Which of these is NOT a characteristic of a command economic system?
encouragement of the pursuit of wealth
6) The portion of U.S. government spending going toward _____ took up the largest percentage of the 2016 budget.
healthcare
7) Use the Comparison of Economic Systems chart to choose the best answers. Which system has profit as a primary motivating factor?
market
Q2) consumers and sellers create a _______ where goods and services are exchanged.
marketplace
Q2) The government controls some but not all industries in a(n) ________ economic system.
mixed
Q1) Which of these represents things you miss out on when you decide to spend your money on something else?
opportunity cost
Q3) ______ the term used for the overvaluing of property or land _______ the point at which a country's GDP and economy reach top efficiency and are immediately followed by a downturn ______ a rise in prices due to the loss of value of money ______ a recession that is very long and severe _______ a person who places money in a bank
over-speculation peak inflation depression depositor
3) Economic ______ is a method of making economic decisions by first weighing the benefits and costs associated with each measure.
perspective
Q1) When a shopper makes a rational choice, he or she _____.
picks the item that represents the greatest value
Q3) Fluctuations through a series of economic expansions and contractions is part of ______.
the business cycle
Consumer rights
the four major rights of a consumer include the rights to choose, to be safe, to be informed, and to be heard
Totalitarian
the rule of one person with near-complete control over the government and country; similar to dictatorship
gross national product (GNP)
the total value of all goods produced by citizens of a particular country, regardless of what country they do business with
gross domestic product (GDP)
the total value of all goods produced in a particular country, regardless of the national affiliation of those who own the company
4) Which length of time makes up a quarter, or the period of time that governments use to measure their economies?
three months
forclose
to take possession of one's property due to one's inability to repay a debt
Q2) A _______ government holds near complete control over the lives of its citizens.
totalitarian
2) Select the first THREE executive departments in the U.S. government.
- Department of the Treasury - Department of State - Department of War
2) Select THREE facts about Adam Smith.
- He authored The Wealth of Nations, a major work explaining that a free market would thrive under the idea of mutual self-interest. - He was greatly influenced by the Enlightenment movement. - The Scottish philosopher influenced the efforts and ideas of democracy advocated by our Founding Fathers.
9) Select FOUR reasons why lack of incentive is one reason for the failure of communism.
- It is illegal to own property or business. - It hampers incentive and improvements. - It often results in a lack of available goods. - The type of government normally associated with communism does not allow for personal freedom.
3) Choose the TWO German philosophers who wrote Das Kapital and the Communist Manifesto.
- Karl Marx - Friedrich Engels
2) How did foreign powers convince the United States of the need for a stronger federal government?
- North African pirates confiscated American goods and kidnapped American sailors. - Both the British and the French closed off ports to American shipping. - the Spanish refused to allow the Americans access to the Mississippi River.
5) Select TWO things that Alexander Hamilton passed to pay the U.S. debt.
- a tax on whiskey - an 8% tariff on imported goods
4) Select THREE historical common causes of U.S. recessions.
- surplus of things such as agricultural products and gold - bad loans - overspeculation
3) Select FOUR characteristics of a market economy system.
- usually honesty in business dealings due to mutual self-interest - private ownership of propery and business - the pursuit of self-interest - consumer power in directing the economy
1) _______ a recession that occured partially due to Andrew Jackson's call to only use hard currency in the sale of public land in order to weaken the national bank ________ the Great Depression ________ the worst U.S. economic crisis prior to the Great Depression; led to the growing popularity of the Populist Party ________ a recession caused by a great influx of gold into the market and a surplus of grain due to participation in the Crimean War ________ a recession created during the Era of Good Feelings due to over-speculation _______ a recession caused by banks making risky loans to homebuyers, leading to a collapse in home prices, unemployment, and declining stock prices _______ a recession that was known for the widespread call for the return of the greenbacks
1837 1929 1893 1857 1819 2008 1873
2)Select if the statement concerns Economic perspective or if it concerns Scarcity. _____ A woman considers her salary when buying a new car. ______ A young man does not go out with friends as he saves for a new suit. _____ Americans cannot drive as much because of high gas prices. ______ Tickets for a concert sell for high prices online because more people wish to attend than tickets are available. _____ A young woman pays for medical insurance rather than purchasing a new television.
Economic perspective Economic perspective scarcity scarcity Economic perspective
Q1) Which government agency deals most directly with consumers and their rights and protection?
Federal Trade Commission
1) During the Revolutionary War, Alexander Hamilton worked as an assistant to ______.
George Washington
4) ____ is a pamphlet of communist economic thinking that highlights the need for a new type of government and economy.
The Communist Manifesto
Double coincidence of wants
The caveat of the barter system is that in a transaction, both people must have something the other wants and be willing to give it up for that other item.
Q3) What was Thomas Jefferson's argument against the creation of a national bank?
The government did not have the constitutional authority to do so.
11) What is the only way that capitalists say can ensure everyone has the chance to be wealthy?
The government leaves alone those who are wealthy.
Q3) Why might the states be upset at the federal government paying off their debts?
The states did not want to be answerable to the federal government and therefore be put in a weaker position.
Q1) ______ money owed that imposes a higher interest rate because repayment is not guaranteed ______ weighs the costs and benefits of each measure before making an economic decision ______ money owed that is guaranteed by the thing it is used to purchase ______ a problem created by unlimited wants and limited resources
Unsecured debt Economic perspective Secured debt Scarcity
Proletariat
a French word that explains the working class as written by Karl Marx and Friedrich Engels
Q3) Which of these would NOT add to the GNP of the United States?
a German-based grocery store in Champan, Illinois
Communism
a form of government that stemmed from the economic ideas of Karl Marx and preaches the idea that all citizens should be equal in wealth and status
bond
a form of loan that the debtor is legally responsible to repay with interest by a certain date
Department of treasury
a part of the federal government responsible for all things related to money, whether the creation of it or the collection of it through taxes by the U.S. government
depositor
a person who places money in a bank
Q3) Where can you find the agency responsible for putting together business cycle information—in particular, when the cycle peaks and plummets?
a private company not found within the government
Q3) Which factor was NOT a cause of the Great Depression?
a protest against U.S. dealings in Southeast Asia
2) What follows a country's economic peak?
a recession
Q3) A country's economic peak is followed by ______.
a recession
Elastic cause
also known as the Necessary and Proper Clause, it is the portion of the U.S. Constitution that allows the federal government to pass laws to assist in carrying out its duties
Q3) Which of these would NOT add to the GDP of the United States?
an American-based investment firm in Switzerland
mixed economy
an economic system in which the government controls vital industries while allowing capitalist or market principles to exist in the rest of the economy, such as private ownership of business and property
market economy
an economic system under which the market determines the major questions of economic production and development (also known as capitalism)
Command economy
an economy in which all decisions are made by the government with little to no input by the people
Specie Circular
an executive order requiring that the purchase of public land be made in gold or silver
National Bureau of Economic Research
an independent and private organization that tracks the actions of the business cycle
revenue bills
any bill passed by the House of Representatives to potentially raise money for government operations
Q1) What segment of U.S. society represents a challenge to the Social Security system?
baby boomer generation
Q3) One major cause of the 2008 financial crisis was that ______.
banks made risky loans and inflated housing prices
Q2) Transactions in a traditional economy are typically done with ______.
barter or trade
Rational choice
behavior that is dependent upon associated benefits and costs and a decision made based on maximum benefit
8) A(n) ________ is a form of loan that the debtor is legally responsible to repay with interest by a certain date.
bond
Q2) There is little chance to gain wealth or succeed in a ______ economic system.
command
Q2) The conducting of business is called ______.
commerce
11) ______ conducting of business ______ a tax on imported goods _______ any bill passed by the House of Representatives to potentially raise money for government operation _______ any measure the government uses to collect revenue from the people to help pay for various services or government actions
commerce tariff revenue bill tax
4) Once in office, Alexander Hamilton first sought to deal with the country's _______.
debt
Secured debt
debt that is guaranteed by the thing that is purchased
Unsecured debt
debt that is not guaranteed by anything and typically warrants a high interest rate
9) Use the Comparison of Economic Systems chart to choose the best answers. Which system is often characterized as an agricultural economy with little technology?
traditional
Q2) A(n) ________ economic system is characterized as agricultural and lacking in technology.
traditional
Q1) The U.S. government debt in 2015 was about _______.
$14 Trillion
Q2) Which scenario would one most likely see in a traditional economic system?
A farmer grows a one-acre farm to produce all the vegetables his family will need over the course of a growing season.
Q2) ________ originated in the ideas of Marx and Engels that taught that all citizens should have the same wealth and social standing.
Communism
13) How did the national government taking on the state debts strengthen the United States?
Taking on the state debts united the states because they then had an interest in seeing the young nation succeed in paying off the bonds.
7) Which of these purchases would require you to have good credit?
an $8,000 loan for a car
12) What was the main argument used against a national bank?
A bank was unconstitutional because the Constitution did not explicitly provide for one.
Q1) Which scenario best explains scarcity?
A man has $20 but wants to take his girlfriend to a fancy steak restaurant, where he needs $70.
Q2) Which philosopher is most associated with a free-market economy based on self-interest?
Adam Smith
Q2) The _______ was a pamphlet of communist economic thought.
Communist Manifesto
Q2) What country or region best exemplifies a traditional economy?
Amazon Rainforest of South America
6) Give an example of a company that would add to the GNP of the United States.
An American company manufactures furniture in North Carolina that is sold in the united States and other countries.
2) What was the problem that created bank runs?
Banks did not have enough cash on hand for all its depositors, so people rushed to withdraw their money.
Q1) Choosing between spending money on a new suit or a vacation is an example of _____.
Opportunity Cost
1) Choose True or False. _______ The U.S. Constitution was the first governing document in U.S. history. ______ The Congress under the Articles of Confederation possessed strong legislative (law-passing) powers. _____ Under the Articles, the Congress made up the legislative branch. ______ Under the Articles, the judicial branch was a powerful force in the federal government. _______ Under the Articles, the Congress had the power to collect taxes from the states. _______ Under the Articles, the Congress did not have the power to regulate commerce or tariffs. ______ Under the Articles, the Congress could amend the document with the approval of two-thirds of the states.
false false true false false true false true
5) According to the tenets of the market economic system, the _______ has little to no role in the country's economy.
government
Q2) Which of these is NOT a characteristic of a market economic system?
lack of private ownership of resources
1) _______ the physical or virtual place where buyers and sellers go to conduct business _______ another economic term for a market economy ________ the idea that the buyer and seller both seek to do what is right for the other in order to guarantee their continued access to the other ______ the collective word for the consumers and sellers within a country _______ a capitalistic economic system in which the market determines the major questions of economic production and development _____ the main goal of those in business in a market economy ______ an economic system in which the government controls vital industries while allowing capitalist or market principles to exist in the rest of the economy ______ the individual buyer, seller, or trader of goods in an economic system
marketplace capitalism self-interest market market economy profit mixed economy consumers
6) Use the Comparison of Economic Systems chart to choose the best answers. In which system does the government control some vital industries while allowing free markets in others?
mixed
Q3) In order for a country's economic condition to be considered a recession, the economy and GDP must be in decline for ___.
six months
Q2) Foreign countries convinced the United States to form a stronger federal government by ________.
taking advantage of the young republic
funding at par
taking in old bonds and reissuing them at full value
Q2) A(n) ________ is a tax on goods imported from other countries.
tariff
expansion
the growth of a country's economy and GDP
self-interest
the idea that the buyer and seller both seek to satisfy the other in order to guarantee continued access to the other and that this practice will ultimately benefit society as a whole
consumers
the individual buyers, sellers, or traders of goods in an economic system
profit
the main goal of those in business in a market economy; the acquisition of wealth
over-speculation
the overvaluing of property or something else
marketplace
the place where buyers and sellers go to conduct business (can be a physical or virtual place)
Peak
the point at which a country's GDP and economy has reached top efficiency; is immediately followed by an economic downturn
Trough
the point at which a country's GDP and economy have reached their lowest point; immediately followed by some type of expansion
scarcity
the problem that arises with limited resources and unlimited wants
Q3) Those suffering from the 1873 depression pushed for ______.
the reissue of greenback dollars from the Civil War
Consumer responsibility
the requirement of the consumer to know as much as possible about a product and its alternatives prior to making a purchase; if this is not done, it could prevent a customer from receiving redress if something goes wrong with something bought
Q3) Economically, the government divides its earning marks into quarters, or every ______.
three months
Q1) What is the biggest responsibility that consumers have?
to educate themselves on the products they are interested in, including their benefits and potential costs or problems
1) _______ Government spending on healthcare has increased due to recent legislation. ______ Social Security is normally paid out in one lump payment upon retirement. ______ The baby boomer generation represents a challenge to the Social Security system. ______ Military spending changed a great deal in the 1970s. ______ The current national debt is roughly $450 billion dollars. ______ China holds a vast portion of the U.S. national debt. ______ The current U.S. budget calls for about $1 trillion a year. ______ Roughly 21% of the U.S. budget is spent on national defense. _____ About 5% of the U.S. budget is spent on welfare. ______ According to experts, most Americans have little understanding of economics.
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