unit 1
who wrote the Wealth of Nations, which expressed the disadvantages of a market economy?
Adam Smith
the first constitution of the US; gave more power to the states and left federal gov weak
Articles of Confederation
what is the government agency that deals with consumers' rights and protection?
Federal Trade Commission
what weakened the US economically during the Articles?
French closed ports; African pirates captured goods and kidnapped sailors; Spanish closed the river; British shut off trade
who believed that capitalism was bad and workers should control the economy?
Karl Marx and Friedrich Engels
independent, private organization that observes & tracks the actions of the business cycle
National Bureau of Economic Research
what country's collapse altered US military spending?
Russia
what is credit
a consumer's record of going into and getting out of debt faithfully and punctually
which best describes a traditional economic system: A farmer who experiments with new agricultural techniques to improve the lives of farmers throughout his home region. A farmer who produces half of his crops for sale in the local market and stores the other half for future use or sale. A farmer who uses a one-acre farm to grow all the vegetables his family will need over the course of a growing season. A farmer who quits his job so that he can pursue his one true passion - music.
a farmer who uses a farm to grow veg for his family
which scenario explains scarcity: A woman decides not to buy a magazine because she did not find the headlines interesting. A man has $20 but wants to take his girlfriend to a fancy steak restaurant where he will need $70. A couple decides to not visit Paris for their honeymoon, even thought they can afford it. Instead, they choose to visit San Francisco, California. A woman decides to buy a house worth $150,000, even though she can afford a $200,000 home. A baseball team owner decides to accept the higher of two bids for his baseball team because he needs the money to repay debt.
a man has $20 but wants to take his girlfriend out where he needs $70
the agency responsible for composing business cycle info
a private company not in the government
what country owns a large portion of the US debt?
china
all economic decisions are made by the government with little or no input by the people in what economic system
command economy
researching a product and learning as much info as possible before purchasing it
consumer responsibility
the end to what war and agricultural surplus caused the depression of 1857?
crimean war
the money owed by an individual, company, or government is:
debt
recession
decline of GDP and economy
first 3 departments of the early US gov:
dept of state, war, and treasury
peak
economy and GDP at best
trough
economy and GDP at worst
consumers have the biggest responsibility to
educate themselves about products including their benefits or costs
concepts in the market economy come from...
enlightenment
period when the economy and GDP begin to improve; lower unemployment, increase in investment, and banks willing to loan
expansion
when the economy moves from a trough to a peak
expansion
business cycle
fluctuations along the GDP line of growth
the purpose of interest
for the lender to make money in exchange for giving money to people who need it
what are the economic issues affecting our lives today?
government regulation unemployment healthcare military spending social security
where were the creators of the mixed economic system from?
great britain
GDP stands for
gross domestic product
the total value of all goods produced in a particular country, regardless of the country's national affiliation
gross domestic product
the total value of goods produced by citizens/companies of a particular country
gross national product
expansion
growth of GDP
what was Thomas Jefferson's argument against the creation of a national bank?
he thought the government didn't have the constitutional authority
what aspect of government spending recently increased?
healthcare
why were the states upset at the government for paying off their debts?
if the states didn't want to be answerable to the fed gov and therefore be put in a weaker position
a rise in prices due to the loss of value of money is due to
inflation
increase of paper money causes
inflation
what made people call the first constitution the "articles of confusion"
it didn't give the fed gov enough power to operate effectively
in a ____ economy, consumers decide what is made/sold/bought
market
what portion of US spending made up the largest percentage of the 2010 budget?
military/defense spending
the things you miss out on when you decide to spend your money on something else...
opportunity cost
what was one of the major causes of the economic downturn of 1819?
over-speculation in the western frontier
the term used for overvaluing of property, land, or other product
overspeculation
the point where the GDP and economy reach top efficiency, then followed by a downturn
peak
when a shopper makes a rational choice, he or she
picks the item w/ the greatest value
what are characteristics of a market economic system?
private ownership of business/property; mutual pursuit of self-interest; consumer power to influence the economy; democratic government that doesn't interfere
a decision based on benefits and costs
rational choice
a decline in economy for 6 months is known as a
recession
a slowdown of the economy; rising unemployment, lack of investment, banks not lending money
recession
an economic peak is followed by a
recession
limited resources and unlimited wants
scarcity
in order for a country to be in recession, the GDP must be in decline for __ months
six
conflicts between Andrew Jackson and ____ resulted in a depression
the Bank of the US
Which of the following would NOT apply to the GNP of the United States? an American-based car company in Nagasaki, Japan an American-based furniture company in Raleigh, North Carolina an American-based microbrewery in Boston, Massachusetts an American-based investment firm in Switzerland a German-based grocery store in Champaign, Illinois
the German based store in Illinois
a "double coincidence of wants" is a problem with what?
the barter system
according to the articles of confederation...
the congress had little to no power
Hamilton's economic plan included:
the creation of a national bank; a tax on whiskey; passing a tariff; paying off the national debt plus interest
economic powers of the US government under the US Constitution:
the government can assume states' debts; a national bank; passing tariffs
the depression of 1893 was responsible for the growing population of...
the populist party
those suffering from the 1873 depression pushed for...
the reissue of greenback dollars from the civil war
what is the importance of Karl Marx and Friedrich Engels?
they thought capitalism was flawed and society needed workers to take control of the economy
the government divides its earning marks into quarters, or every ___ months
three
Which rights did JFK include in his speech?
to be informed, to safety, to choose, to be heard when a problem arises
what does one need good credit for?
to purchase a house
GNP
total value of all goods produced by companies from a particular country, regardless of the country they produce in
GDP
total value of all goods produced within a country, regardless of the national affiliation of that company
characteristics of a command economic system:
totalitarian government; no private ownership of resources; limited goods; no ownership of private property
the lowest period of the economy and GDP
trough
gross domestic product
value of all goods made within a country
gross national product
value of all goods native to a country regardless of what country they do business with
who was an opponent of Hamilton's national bank proposal?
Thomas Jefferson
which scenario is NOT based on economic perspective: A young professional chose the least expensive of two houses so that she could use the difference in price to fix up her new home just the way she likes it. A college student decided not to take a German class but rather signed up and paid for a calculus class to assist her in landing a summer internship that could lead to a well-paying job after graduation. A boy considered buying three packs of baseball cards but decided against it when he realized that the same price of the three packs could get him a ticket to a baseball game, which he valued more. A young man bought an old car without giving much thought to the costs associated with needing to fix the vehicle. A young investor chose to take his life savings and buy property in an area that he knew would be developed in the next five years.
a young man bought a car w/o giving thought to the cost of fixing the vehicle
which philosopher is associated with the market economy?
adam smith
weaknesses of the Articles:
all states had to approve changes; each state only had one vote; congress didn't have power to levy tariffs; congress couldn't force states to pay taxes
what country best represents a traditional economy?
amazon rainforest of South America
which would NOT apply to US GDP: a Mexican-based fast-food restaurant in Little Rock, Arkansas an American-based retail company in Fort Worth, Texas an American-based investment firm in Switzerland a Japanese-based television company in San Jose, California an American-based car company in Mobile, Alabama
an American based company in Switzerland
which is NOT an economic power of the US gov under the Constitution: levy taxes; enforce taxes and regulate commerce; negotiate treaties w/ other countries; appeal to states
appeal to the states
what represents an upcoming threat to the social security system?
baby boom generation
in a ___ system, people trade items for other itesm
barter
transactions in a traditional economy are typically done with...
barter or trade
after the Great Depression started, why did Europe trade less with the US?
because of the high tariffs passed by US Congress
fluctuations along a country's GDP line:
business cycle