Economics Unit 4

Under the ACA, all private insurers and employers have to cover children of employees until the children reach:

26 years of age.

U.S. Savings Bonds

A U.S. government savings bond, often in small denominations, that offers a fixed rate of interest over a fixed period of time.

Budget deficit

A budget in which expenditures are greater than revenues.

Balanced budget

A budget in which revenues are equal to expenditures.

Budget surplus

A budget in which revenues are greater than expenditures.

A budget in which revenues are greater than expenditures is known as:

A budget surplus.

A self-sufficient economy with no imports are brought in and no exports are sent out is known as:

A closed economy.

Inflation rate

A common term for the consumer price index rate (CPI).

A decline in housing starts would most likely signal:

A decline in GDP.

Which of the following would NOT be likely to be a problem if the decline in American labor participation continues?

A decline in production.

Which of the following is NOT a contributing factor on the declining participation in the American labor force?

A decline in the number of employers.

Medicare

A federal health insurance program for people who are 65 or older, or certain people with disabilities.

Medicaid

A federal-state program helping low-income individuals or families pay for the costs associated with long-term medical care.

Treasury bonds

A government bond issued by the US Treasury with a maturity date greater than 10 years.

Which of the following is true?

A government's deficits become the national debt.

Insurance exchange

A government-regulated marketplace of insurance plans that individuals without health care and small companies can use to compare and purchase policies.

Outflow from a circular flow of income model, especially from taxes, savings, or imports - is known as a:

A leakage.

Currency devaluation

A loss in the value of money due to government policies or lack of consumer confidence in the currency.

Treasury notes

A marketable U.S. government security with a fixed interest rate and a maturity of between one and 10 years

Factor markets

A marketplace where factors of production (such as labor, capital, and resources) are bought and sold.

Consumer confidence index (CCI)

A measure of consumer confidence as determined by savings and spending patterns.

Consumer price index (CPI)

A measure of the variation in prices paid by consumers for retail goods and other items; often called the "inflation rate) by the general public.

Circular flow model

A model of the economy in which the major exchanges are represented as flows of money, goods, and services between economic agents.

Quantitative easing

A monetary policy in which a central bank purchases government securities from the market in order to lower interest rates and increase the money supply.

Obamacare

A popular name for the Affordable Care Act.

Closed economy

A self-sufficient economy with no imports are brought in and no exports are sent out.

Depression

A severe and prolonged downturn in economic activity.

Baby boom

A significant increase in the birth rate, especially the one following World War II from 1946 to 1964.

Monetary policy

Actions of a central bank or government body to determine the size and rate of growth of the money supply, which in turn affects interest rates.

Injection

Additions to investment, government spending, or exports that boosts the circular flow of income

Quantitative easing is a policy designed to strengthen the economy through:

Adjusting money supply.

Industrial production index

An economic indicator measuring the amount of output from the manufacturing, mining, electric and gas industries.

Housing starts

An economic indicator reflecting the number of privately owned new housing units on which construction has been started in a given period.

Flow

An economic term describing how goods, services, and money move from one participant in the economy to another.

Open economy

An economy in which there are economic activities between the domestic community and outside nations.

Which of the following would be an example of an activity covered by a simple economic circular flow model?

An employee receiving a paycheck from an employer.

Lagging indicator

An indicator that occurs after the start of a recession or period of growth.

Coincident indicator

An indicator that occurs at roughly the same time as the conditions it measures.

Leading indicator

An indicator that occurs before the start of a recession or period of growth.

Census

An official count of a population that generally records various data on individuals.

Mandate

An official order to do something.

Inputs

Another term for factors of production.

Zero bound problem

As the central bank lowers rates to zero to stimulate the economy, it cannot go any lower, so it must find other ways to grow the money supply and improve the economy.

Fixed assets

Assets purchased for long-term use and not likely to be converted quickly into cash, such as land, buildings, and equipment.

Recession

At least two straight quarters of a downturn in economic activity.

Economists use of the producer price index (PPI) to predict:

Changes in consumer prices.

Which of the following was NOT a goal of the Affordable Care Act (ACA)?

Create panels to determine which patients get critical health care.

Increases in public spending that drive down or eliminate private sector spending cause the following:

Crowding out effect.

A rise in housing starts is generally associated with:

Economic growth.

Goods and services produced domestically but purchased by people in another country are known as:

Exports.

The methods by which a government adjusts its spending levels and tax rates to influence a nation's economy are known as:

Fiscal policy.

Gross national product (GNP)

GDP, plus any income earned by residents from overseas investments, minus income earned within the domestic economy by overseas residents.

Exports

Goods and services produced domestically but purchased by people in another country.

Imports

Goods and services produced in another country but purchased by people domestically.

Outputs

Goods or services produced in a given time period, by a firm, industry, or country.

Which of the following would NOT be an example of an entitlement program?

Government contracts to build roads.

Entitlement programs

Government programs that provide certain benefits to a particular group, such as veterans, the elderly, or the needy.

The monetary value of all goods and services produced in a nation over a specified period of time is known as:

Gross domestic product.

A sharp rise in the consumer confidence index (CCI) would most likely signal:

Growth in GDP.

Affordable Care Act

Health reform legislation passed Congress and signed into law by President Barack Obama in 2010.

Goods and services produced in another country but purchased by people domestically are known as:

Imports.

Cost of living adjustments

Increases in benefits or wages to offset changes due to inflation.

Crowding out effect

Increases in public spending driving down or eliminating private sector spending.

Economists typically use CPI to monitor:

Inflation and deflation.

The non-farm employment change report is a good indicator of:

Manufacturing employment.

The federal-state health insurance program for low-income individuals and families is known as:

Medicaid.

Socialized medicine

Medical and hospital care for all citizens by means of public funds.

The federal health insurance program for the elderly and the disabled is known as:

Medicare

Subsidy

Money granted by the government to assist an industry or business so that the price of a commodity or service will stay lower than would normally be the case.

Income

Money received, especially on a regular basis, for work or through investments.

The total amount of money that a country's government has borrowed over time is known as:

National debt.

Quality bias

Occurs when an index ignores changes in the quality of the goods it measures.

Substitution bias

Occurs when two or more similar items have a change of price relative to each other.

A worker who could not find a good-paying factory job and who became discouraged would likely be categorized by the government as:

Out of the labor force.

A worker who was laid off from his job at a factory and is no longer looking for work would likely be categorized by the government as:

Out of the labor force.

A worker who worked over 40 years at a factory and is now drawing a pension would be categorized by the government as:

Out of the labor force.

Leakage

Outflow from a circular flow of income model, especially from taxes, savings, or imports.

The rise in price associated with a new car that was used in developing the consumer price index (CPI) that suddenly doubled its gas mileage (miles per gallon) would be an example of:

Quality bias.

Treasury bills

Sometimes called "T-Bills," these are short-term debt obligations backed by the U.S. government with a maturity of less than one year.

Demographics

Statistical data relating to the population and particular groups within it.

The following entity is most responsible for federal monetary policy:

The Federal Reserve.

Expenditure

The action of spending funds.

Maturity date

The date on which the principal amount of a note, bond or other security becomes due and is repaid to the investor.

GDP per Capita

The gross domestic product (GDP) divided by the number of people in the country.

Fiscal policy

The methods by which a government adjusts its spending levels and tax rates to influence a nation's economy.

Gross domestic product (GDP)

The monetary value of all goods and services produced in a nation over a specified period of time.

Unemployment rate

The percentage of workers out of work at a given moment in time.

Production

The processes used to transform inputs into goods or services.

Participation in the labor force

The rate at which able-bodied workers choose to join the workforce.

National debt

The total amount of money that a country's government has borrowed.

GDP must be divided by the following number to determine the GDP per capita:

Total population.