2-2 econ

Economic freedom

Americans choose jobs and how to use their money

why is economic security an important goal of the United States?

Americans desire protection from adverse economic conditions, such as layoffs and illness

Full employment

Circular flow of economic activity

What is the opportunity cost of a policy of protecting a domestic industry, such as shoe manufacturers?

Consumers end up with fewer choices.

Economic equity

Fairness for all, no job discrimination

What happens if resources are wasted?

Fewer goods and services are produced and fewer wants and needs can be satisfied.

Price stability

Inflation= rise on prices. People on a fixed income struggle to pay bills, income that does not increase as prices rise.

What is the trade-off in increasing the minimum wage?

It may raise unemployment and restrict the freedom of employers.

What happens when people do not have jobs?

People cannot support themselves or their families, nor can they produce output for others.

Economic efficiency

Productions possibilities frontier is at full potential

Economic security

Social security: federal programs that financially covers retirement and disability benefits for working people. Medicare: federal program to provide health care to retired workers

What are three examples of economic freedom for individuals?

They can choose their own occupations, employers, and uses for their money

What happens when people work?

They earn income for themselves while they produce goods and services for others

What happens to people on fixed incomes when there is inflation?

They find it harder to meet their bills and plan for the future.

What is inflation?

a rise in the general level of prices

What do American workers want protection from?

adverse economic events

economic efficiency

an economic goal that is based on the desire of people to use resources wisely

What kind of protection does Social Security offer?

disability and retirement benefits

What are two kinds of goals people may share?

economic and social

What are two examples of economic equity?

equal pay for equal work; forbidding advertisers to make false claims about their products

economic goals are important because they

help us determine if our economic system is meeting our needs

What is a "lemon law"?

laws that allow new car buyers to return their cars if they have too many repairs

How many major kinds of goals are there?

seven

Why must economic decision making be efficient?

so that benefits gained are greater than costs incurred

Economic Growth—Why is economic growth needed as a population grows?

so that people can continue to have adequate goods and services

What kind of economic freedom do business owners want?

the freedom to choose where and how they produce

an increase in the minimum wage rises the unemployment rate. This is an example o

the trade-off among social and economic goals

which is an example of economic growth

when a new ball bearing plant opens, 1,500 jobs are created