Economics, Unit 1 - 5

time deposit

a type of savings account that pays higher interest but does not allow the premature withdrawal of money without paying a penalty

5) According to the tenets of the market economic system, the _______ has little to no role in the country's economy.

government

6) The control and regulation of the amount of money in circulation, a key responsibility of the Fed, is known as ___ policy.

monetary

representative money

money backed by a valuable item, such as gold

fiat money

money that is recognized and ordered to be such by a government

Q1) The absence of any competition within a particular market of a good or service is a(n) ________.

monopoly

5) A(n) ____ is a loan in which the property purchased secures the loan.

mortgage

Q2) A loan in which the property purchased secures the money borrowed is a(n) ______.

mortgage

Q1) Alberto owns a sporting goods store that specializes in soccer equipment. By trying different prices throughout the year, he has been able to construct this demand curve for soccer balls. How many soccer balls can Alberto expect to sell in a week at $25 each?

18

7) _______ means taking in old bonds and reissuing them at full value.

Funding at par

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) Jennifer owns a crafts shop, and in 2017, she decides she needs an economic profit of $300,000 in order to open a new shop in 2011. Consider the following information about her shop in 2018: She spent $10,000 on new equipment to make pottery. She spent $30,000 in wages. She took out a $10,000 loan at 3% interest. She made $200,000 in total revenue. She spent $15,000 paying bills. Can Jennifer open a new shop in 2018?

No, she is short $155,300

3) What was the effect of the Specie Circular policy?

Paper currency lost value.

10) Why should consumers avoid paycheck loans?

Paycheck loans involve high interest rates and fees.

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.

9) Which government move would be an example of automatic fiscal policy

Unemployment benefit payments decrease as employment increases.

Q1) Which of these is the likely effect of deflation?

Unemployment increases as profits decrease because shoppers wait for even lower prices.

4) ___ is the ability of money to hold its value while not being spent.

Unit of account

7) Why is the United States concerned about China's devaluation of the yuan?

When large economies like China have undervalued currency it could badly impact smaller economies. And because China forces its currency lower, trading partners have to spend more money. There is the concern that thousands of jobs could be lost in the U.S. due to China's policies.

Q3) Who was responsible for the creation of the Federal Reserve System?

Woodrow Wilson

9) What was the result of the lack of property rights in the Soviet Union?

Workers and businesses were not very productive.

8) The Bank for Reconstruction and Development is simply known as the ______.

World Bank

4) What is the formula for calculating GDP?

Y = C + I + G + NX

Proletariat

a French word that explains the working class as written by Karl Marx and Friedrich Engels

Q1) Which purchase requires good credit?

a house

Q1) Which of the following would NOT be an inferior good?

a leather couch

limited liability company (LLC)

a legal entity combining aspects of corporations, partnerships, and sole proprietorships that protects owners from personal liability

mortgage

a loan in which the property purchased secures the loan

depression

a long and severe form of a recession

shortage

a market condition in which demand is greater than supply

surplus

a market condition in which supply is greater than demand

black market

a market outside of government supervision where goods are sold illegally

4) Which items are NOT complement goods?

a radio and a television

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

1) __________ goods can be produced and supplied in lieu of another item.

alternative

7) Which of these purchases would require you to have good credit?

an $8,000 loan for a car

Q1) Which shift does the chart show? \ --> \

an increase in demand

Q3) Which government move would be an example of automatic fiscal policy?

an increase in welfare spending because more people qualify for benefits

oligopoly

an industry with few competitors and high barriers to entry

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

commerce

conducting of business

4) Once in office, Alexander Hamilton first sought to deal with the country's _______.

debt

Q3) Businesses have a legal responsibility to make certain accommodations for ____ customers.

disabled

Q3) When Congress creates an act that affects fiscal policy, it is considered a(n) ________________ fiscal policy.

discretionary

Q3) Dividing your money among multiple investments is the principle of ________.

diversification

Q1) A business anticipating a cold winter by manufacturing snow shovels in July is an example of _____ affecting a change in supply.

expectations

Q3) Explicit costs are measured by ____.

expenditures paid for with money

5) Match the statements with the answers using the circular flow model graph. The resource market provides households with _______. The product market provides businesses with _______. Businesses provide the government with _______. The product market provides the government with _______. Households provide the product market with _______.

income revenue taxes goods and services expenditures

5) The U.S. government has gradually become more involved in the economy since the ___.

late 1800s

9) The reason why the demand curve goes in the direction it does shows the ___ of demand.

law

regulation

laws and rules imposed on businesses by the government

Q1) The National Football League enjoys a ________.

legal monopoly

3) Which type of automobile insurance is required by every state?

liability

2) The _________ cost is the change in total costs at each unit of product increase.

marginal

Q2) Identify the point where the supply and demand curves intersect.

market equilibrium

Q2) In nonrestricted economies, ____ almost always eliminate shortages and surpluses

market forces

Q2) consumers and sellers create a _______ where goods and services are exchanged.

marketplace

2) Select THREE things covered by homeowners insurance.

medical care for a guest who receives a burn from the grill on your back porch part of the home destroyed by a fire valuable items stolen from the garage

Q1) The gross ______ product is a measure of the total value of final services and goods produced in a year by citizens of a country.

national

Q1) Which answer is NOT a factor that can change demand?

natural and man-made disasters

Q1) When one company can offer a product at a lower price than other companies due to some advantage, it is said that it can create a _______.

natural monopoly

Q1) A(n) _______ occurs when there are few competitors and high barriers to entry within an industry.

oligopoly

12) What is the goal of a mixed economic system?

prevent the abuses and shortcomings of both the command and market systems

6) A(n) ____ tax is assessed against the value of the home and the land it sits on.

property

Q1) The Takings Clause allows the government to practice eminent domain, or the taking away of property if the government ________.

provides fair payment for the property

Q1) Which period of the business cycle follows the peak?

recession

5) Which type of bank was created to encourage people to save for large purchases such as homes?

savings and loan associations

Government expenditures

spending done by governments at all levels; Symbolized by the letter "G," it is one of four components in figuring gross domestic product (GDP).

Q3) At which point does the total product curve reach negative marginal returns?

the addition of the 8th worker

principal

the amount borrowed; used to calculate interest payments

implicit cost

the costs associated with the use of the factors of production but not paid with money (such as the idea of depreciation)

Q3) Which of these are the long-term effects of the total elimination of the gold standard?

the economy as a whole fluctuating much more unpredictably

right to choose

the right of Americans to choose what they buy and how much they spend without government pressure

Q1) Which answer is NOT a component of the free enterprise system?

the right to make consumers pay

Totalitarian

the rule of one person with near-complete control over the government and country; similar to dictatorship

total product

the total amount of a product produced in a given period of time

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forclose

to take possession of one's property due to one's inability to repay a debt

Q2) Which of the following would NOT be an example of money?

your first credit card

quality change effect

failure to represent changes in the quality of goods in the CPI index

new goods effect

failure to represent the greater value of new goods in the CPI index

Q2) A minimum price for a good or service set by the government is a price _____.

floor

Q2) The government controls some but not all industries in a(n) ________ economic system.

mixed

1) Jennifer owns a crafts shop. Consider the following information about one year in her shop: She spent $10,000 on new equipment to make pottery. She spent $30,000 in wages. She took out a $10,000 loan at 3% interest. She made $200,000 in total revenue. She spent $15,000 paying bills. What are Jennifer's costs (explicit and implicit) for the year?

$55,000 - explicit $300 - implicit

13) Chaney's Bagel Shop has a revenue of $105,000, fixed costs of $34,000, and variable costs of $22,500. What is Chaney's total cost?

$56,500

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.

3) Choose the TWO German philosophers who wrote Das Kapital and the Communist Manifesto.

- Karl Marx - Friedrich Engels

5) Select TWO things that Alexander Hamilton passed to pay the U.S. debt.

- a tax on whiskey - an 8% tariff on imported goods

2) Select the four rights of a consumer.

- right to choose - right to be heard - right to be informed - right to saftey

medium of exchange

one of the three functions of money; something that is accepted in return for a good or service

7) Select the best answer. Which graphic shows a supply curve?

/ --> /

Q2) ___ almost always lead to market shortages.

price ceilings

1) The ________ is the amount borrowed that is used to calculate interest payments.

principal

4) Arrange the steps of renting in chronological order using the numbers 1 - 5.

1. Identify potential places to rent. 2. Meet with landlord or apartment manager to ask questions and tour the property. 3. Submit an application and pay the security deposit. 4. Complete a detailed inspection of the property to determine issues. 5. Arrange for services such as electricity and cable.

Q1) The amount borrowed in a loan and that is used to calculate interest payments is the _______.

principal

Q3) A(n) ______ traded company issues shares of ownership through stock offerings.

publicly

9) What is the likely outcome of a price ceiling?

A shortage of goods and services will occur.

6) Aggregate demand is also known as total __________.

spending

8) In the United States, there are ___ Federal Reserve districts, each with its own bank that oversees the banking and financial institutions within its borders.

12

12) How many of the Federal Reserve bank presidents serve on the Federal Open Market Committee?

5

12) What was the main argument used against a national bank?

A bank was unconstitutional because the Constitution did not explicitly provide for one.

3) Select THREE responsibilities businesses have to consumers.

A business cannot sell an item that is known to be defective. A business cannot advertise a product or service as being able to do something that it cannot. A business must also comply with the Americans with Disabilities Act of 1990.

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.

Q3) _______ cost is the total of all expenditures a business makes including the depreciation of any capital.

Accounting

4) _______ supply is the total supply of all goods and services within an economy at a certain price level within a particular period of time.

Aggregate

1) President ___ was responsible for the dismantling of the first national bank of the United States.

Andrew Jackson

7) Why are checks not money?

Checks only authorize banks to transfer money.

Q1) What country owns a large portion of U.S. debt?

China

Q2) The _______ was a pamphlet of communist economic thought.

Communist Manifesto

Q2) A _______ government holds near complete control over the lives of its citizens.

totalitarian

Q3) Which was one of the first three departments of the early American government?

Department of State

Q1) Which retailer would be seen as part of the CPI bias known as the outlet substitution effect?

Dollar Tree® (discount variety store)

Q1) At which price point will Barry's have the most revenue?

E

7) Select TWO facts about exchange-traded funds (ETFs).

ETFs can be traded in real time on a stock exchange. An ETF is a portfolio, or basket, of investments.

Q3) _______ profit is total cost subtracted from total revenue.

Economic

3) Use the chart to answer the question. When the Fed buys securities, which of the following happens?

Economic growth increases.

3) What was the effect on European economies after banking grew more common?

European countries grew in wealth and power and in dominance over lesser developed areas.

Q1) What aspect of government spending recently increased greatly in the spring of 2010?

Healthcare spending

3) ________ Renters are more likely to deal with a private individual as a landlord and not a company. ________ Renters enjoy the convenience of not having to mow a yard or do their own maintenance. ________ Renters can access amenities such as a pool, game room, or gym.

House Apartment Apartment

M2

M1 plus savings deposits, time deposits, money market funds, and any other type of deposit

9) What is a criticism of the World Bank?

Many developing nations have been unable to repay loans.

11) What is the likely outcome of a market economy free of restrictions?

Market forces will naturally eliminate shortages and surpluses.

Q3) _______ funds were created to pool investors' money and encourage small, periodic investments.

Mutual

9) The most important of the Federal Reserve districts is the Federal Reserve Bank of ___.

New York

10) By which time must Congress and the President pass a federal budget for the next fiscal year?

October 1st

Q3) Congress and the President are responsible for passing a federal budget before ___ of each year.

October 1st

Q3) ______ cost is what is given up when a company decides to commit capital to a certain course of action.

Opportunity

Q3) The depression of 1893 was directly responsible for the growing popularity of the _____ Party.

Populist

Q2) ___ almost always lead to a surplus of goods and services.

Price floors

Q3) _______ is the average of total products produced divided by the number of workers.

Productivity

Q2) _______ is the primary motivating factor in a market economic system.

Profit

1) ___ is the amount one is willing to sell or capable of selling at any given time and price

Quantity supplied

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

Q3) Which President was responsible for eliminating all connection between the dollar and gold?

Richard M. Nixon

5) The collapse of ________ greatly altered U.S. military spending.

Russia

3) Alexander Hamilton was the first ______.

Secretary of the Treasury

3) According to the "Economics in the News" article, which of the following has happened to the U.S. economy since the elimination of the gold standard?

The United States has experienced higher unemployment, slower growth, and a general decline in economic stability.

In general, what happens to equilibrium price if supply increases?

The price moves lower.

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.

8) Select TWO facts about 401(k)s.

They are retirement savings accounts to which employees and employers make tax-deferred contributions. Companies often match employee contributions.

6) ______ was one of the leading opponents to Alexander Hamilton's request for a national bank.

Thomas Jefferson

Q3) ________ product is the entire amount of a product produced during a certain time period.

Total

savings bank

a financial institution that only accepts savings deposits and makes loans to individuals

6) ______ Commercial banks accept checkable deposits, savings deposits, and time deposits. (t) ________ Time deposits have a very low interest rate, and you can withdraw the money anytime you want. ______ A savings and loan association is exactly like a commercial bank. ______ A credit union is unique in that it is owned by members of a particular group of people, like teachers or federal employees. _______ Thrift institutions refer to commercial banks like Wells Fargo or Bank of America.

True False False True False

4) The central bank only deals with ___.

U.S. banks

6) Select TWO things that are considered money in the United States.

a five-dollar bill in your pocket the coins you used to buy a soda

3) The Federal Reserve System was created as part of the agenda of President ___.

Woodrow Wilson

depositor

a person who places money in a bank

broker

a person who serves as a middleman between the investor and the market

Q3) One of the major causes of the economic downturn of 1819 was _______.

a wave of overspeculation in the Western frontier territories

means of payment

a way of paying off a debt

3) List the stages of the business cycle in order.

a. expansion b. peak c. recession d. trough

Q3) The federal _____ is an annual document created by Congress detailing government taxes and spending.

budget

Q2) There is little chance to gain wealth or succeed in a ______ economic system.

command

Q3) What was NOT a part of Hamilton's economic plan?

creation of a new set of bank notes

Q2) Paper money and coins are _____.

currency

Q2) An electronic version of paper money that is becoming more popular is called _______.

e-cash

4) The value of a home minus the amount still owed on the loan representing the worth of a home in real terms to the homeowner is called ___.

equity

Q2) The worth or value of a home to an owner after subtracting any home loan is the _______.

equity

5) Select the best answer.

fall

Q1) ______ According to the law of demand, as prices rise, so will demand. (f) ________ Goods in joint supply are produced from the same resources. (t) ________ Conspicuous consumption involves only purchasing what is necessary. (f) ________ Change in quantity demanded is based solely on changes in price. (t) _________ According to the law of supply, as prices decrease, the quantity of a product decreases. (t) ________ According to the law of supply, as prices rise, so will supply. (t)

false true false true true true

5) ________ allowed Chinese merchants to keep money in safe places and use it elsewhere _______ guaranteed American depositors' money if their bank closed ________ the first bankers in Europe who held gold in safes and rented space in their safes _______ the place where banking, in its truest sense, first developed _______ acked a common, central banking system until the Revolutionary War ______ led to the organization of banking in the United States ______ allowed insurance and securities companies to offer banking services

flying money the Federal Deposit artisan bankers Mesopotamian civilizations Great Britian's American --- Hamilton's creation of a na-- Gramm-Leach-Bliley Act

6) A(n) _______ is the taking over of a home once a homeowner can no longer pay for the home loan.

foreclosure

6) The portion of U.S. government spending going toward _____ took up the largest percentage of the 2016 budget.

healthcare

withdrawal

in banking, the removal of capital (money) from a bank

total variable cost

in the short term, this is the cost of those factors of production that can be changed (labor)

total fixed cost

in the short term, this is the cost of those factors of production that cannot be changed (land, capital, entrepreneurship)

Q1) If there are no private property rights, people have no ________ to invest or work.

incentive

4) Goods in _________ are goods produced from the same resource.

joint supply

Q3) In a short-term decision, which of these is not a fixed cost?

labor

Q2) Which of these is NOT a characteristic of a market economic system?

lack of private ownership of resources

Q1) Households provide the resource market with ___.

land, labor, capital, and entrepreneurship

Q3) Who is most likely to benefit from an economy of scale?

larger companies such as Home Depot or Target

Q2) ______ insurance is typically used to care for a policyholder's family in case of death.

life

Q3) Only the ________ costs associated with the factors of production are variable.

long-term

store of value

one of the three functions of money; the ability of money to hold its value while not being spent (allows money to be saved or invested)

substitute good

one product that can be used in place of another product

stockholder

one who owns a stock (or a share) of a public company

Q1) Which factor is NOT used to calculate a credit score?

one's type of employment

11) Another way to consider depreciation is that it is the ___ of using capital.

opportunity cost

Q1) Which of these represents things you miss out on when you decide to spend your money on something else?

opportunity cost

8) Aggregate supply is also known as total ________.

output

Q1) "...nor shall ________ property be taken for public use, without just compensation."

private

Q1) What a currency can buy in relation to another currency is its _____ power.

purchasing

3) The amount one is willing to buy or is capable of buying at any given time and price is the ________.

quantity demanded

2) A change in __________ affects the amount of a particular good or service as a result of a change in price.

quantity supplied

Q3) During the 2008 financial crisis, the Fed reduced _____ requirements and lowered the discount rate to encourage growth.

reserve

delayed gratification

resisting the temptation to receive an immediate reward, and waiting instead for a later, greater reward

14) One thing that is always fixed is the amount of ________.

resources

Q1) The resource market provides the government with ___.

resources

Q3) The amount of ______ available will always be fixed.

resources

3) Americans have the ___ what they buy, without government pressure.

right to choose

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

Q2) A means of payment is a way of ___.

settling a debt

Q3) Labor is the only variable when making a(n) _______ production decision.

short-term

Q2) When demand is greater than supply, a market experiences a(n) ______.

shortage

9) For most consumers, a home loan represents the ________ transaction they will ever make.

single largest

perfect competition

situation in which there are many possible sources for consumers to visit and purchase the same product

Investments

spending done by firms and companies with the intent to help themselves grow or become more efficient; Symbolized by the letter "I," it is one of four components in figuring gross domestic product (GDP).

Q2) Traditional _______ loans have the same rate and payments for the life of the loan.

standard fixed-rate

1) ________ Neither the rate nor mortgage payments change in these loans, which are available to all buyers. ________ The rates and mortgage payment can change as the Federal Reserve changes interest rates. ________ The federal government insures these loans, which are a legacy of President Roosevelt's New Deal. ________ Members of the military and veterans may qualify for lower interest rates and no down payment.

standard fixed-rate loan flexible-rate loan FHA loan VA loan

3) Any change in the quantity supplied when an influence other than price occurs is a change in _________.

supply

4) The amount of a good or service that producers are willing and able to sell at a specific time is the _____________.

supply

Q1) The ______ is the amount of a service or good that producers are willing and able to sell at a specific time.

supply

open market operations

the actions of the Federal Reserve System to impact the demand of money, inflation, and economic growth

Q3) At which point does the total product curve reach decreasing marginal returns?

the addition of the 5th worker

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

market equilibrium

the point of balance between quantity demanded and quantity supplied

economic profit

the sum of the total revenue of a company minus the total cost

foreclosure

the taking over of a home once a homeowner can no longer pay for his or her home loan

commodity substitution effect

the tendency of people to respond to rising prices by buying cheaper substitutes of the particular good, skewing the CPI calculation because it measures spending by the higher-priced product and does not account for substitution

gross wages

the total amount an employee is paid before any deductions

4) Which length of time makes up a quarter, or the period of time that governments use to measure their economies?

three months

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

10) The demand curve can only be oriented in one direction.

true

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

6) Answer the question using the stock quote. In which direction has the AAPL moved during the current trading day?

up

Q2) The extent to which consumers gain happiness or benefit from their purchase is its _____.

utility

3) In the short term, factor of production with total _________ cost can be changed by adjusting labor.

variable

economy of scale

when a business increases its facilities and workforce by the same percentage, and output increases by a larger margin while costs decrease

10) In October 2010, the amount of money held by individuals and companies was $893.4 billion; checkable deposits owned by the same individuals and companies were $345.6 billion; money market funds were $1.9423 trillion; savings deposits were $989.4 billion; finally, time deposits were $243.8 billion. What is the M1 for October 2010?

$1.24 trillion or $1,239 billion

Q2) In October 2010, the amount of money held by individuals and companies was $987.1 billion; checkable deposits owed by individuals and companies were $567.3 billion; money market funds were $1.045 trillion; savings deposits were $562.3 billion; time deposits were $324.2 billion. What was the M1 amount in October 2010?

$1.55 trillion

12) What would be the real domestic output if demand pushed the equilibrium point to 135?

$16 trillion

11) In October 2010, the amount of money held by individuals and companies was $893.4 billion; checkable deposits owned by the same individuals and companies were $345.6 billion; money market funds were $1.9423 trillion; savings deposits were $989.4 billion; finally, time deposits were $243.8 billion. What is the M2 for October 2010?

$4.41 trillion or $4,414.5 billion

Q3) Janna's Floral Shop has fixed costs of $17,000. This year her variable costs increased from $25,400 to $31,700. What is her current total cost?

$48,700

Q3) An investor sells 150 shares of Amazon (AMZN) stock at $35.00 and pays a $7 commission. What is the total amount of money received by the investor?

$5,243

7) Answer the question using the stock quote. How much would it cost to purchase 50 shares of AAPL, including a fee (commission) of $10.95?

$5,907.45

3) Jennifer owns a crafts shop. Consider the following information about one year in her shop: She spent $10,000 on new equipment to make pottery. She spent $30,000 in wages. She took out a $10,000 loan at 3% interest. She made $200,000 in total revenue. She spent $15,000 paying bills. What is Jennifer's opportunity cost for the year?

$55,300

2) Select the first THREE executive departments in the U.S. government.

- Department of the Treasury - Department of State - Department of War

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.

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.

Q2) Which of the following is a function that money serves?

- store of value - unit of account - medium of exchange

5) Select THREE causes of the Great Depression.

- surplus of agricultural goods leading to lower prices - higher tariffs - poor use of credit

4) Select THREE historical common causes of U.S. recessions.

- surplus of things such as agricultural products and gold - bad loans - overspeculation

Q3) Fiscal policy is the responsibility of ___.

Congress and the President

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.

10) What is the likely outcome of a price floor?

A surplus of goods and services will occur.

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.

5) At the top of the Federal Reserve System is a seven-member panel known as the ______.

Board of Governors

2) _________ a change in the quantity people are willing to buy if something other than price changes ________ a good or service that will see an increase in demand as income increases _________ when price is the cause of a change in demand and all other things remain the same ________ goods or services that are used together; normally, a decrease in the price for one good will increase the demand for the other good ________ the purchase of normal goods to display wealth rather than meet real needs ________ one product that can be used in place of another product ________ a good or service that will see a decrease in demand as income increases and an increase in demand as income decreases

Change in Demand Normal Good Change in quantity demand Complement good Conspicuous Consumption Substitute good Inferior good

5) Complete the acronym NICEJAG. _____ Natural or man-made disasters _____ Input _____ Competition _____ Expectations _____ Joint supply _____ Alternative goods _____ Government action

N I C E J A G

1) The ______ is an independent and private organization that tracks the actions of the business cycle.

National Bureau of Economic Research

5) Jennifer owns a crafts shop. Consider the following information about one year in her shop: She spent $10,000 on new equipment to make pottery. She spent $30,000 in wages. She took out a $10,000 loan at 3% interest. She made $200,000 in total revenue. She spent $15,000 paying bills. Would Jennifer be better off returning to a previous job where she earned $75,000 a year?

No, since her economic profit is almost double her previous income.

2) Select TWO facts about real GDP and potential GDP.

Potential GDP tracks what the real GDP would be if the economy were at full employment. Real GDP measures the total value of all actual final goods and services produced in a specific time frame.

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

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.

4) The _______ Clause allows the government to confiscate private property if it provides "just compensation."

Takings

11) Select TWO ways that technology increases the likelihood of profit and economic growth.

Technology increases the productivity of workers. The more a worker can produce, the more profit can potentially be earned as a result. Technology spurs economic growth by helping workers find new, more efficient ways to produce.

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.

15) Which answer is an example of an economy of scale?

The largest producer of banana pudding negotiates lower prices with banana growers eager to sell more of their fruit.

Q3) Which of these would NOT add to the GNP of the United States?

a German-based grocery store in Champan, Illinois

commodity

a basic good that is interchangeable with other commodities of the same type

10) In the "Economics in the News" article, the Idaho Court of Appeals said that the city of Emmitt had overstepped its bounds by confiscating property without attempting to gain ___.

a binding agreement

government security

a bond issued by the government and backed by the country's credit

brokerage

a business that handles transactions and keeps track of investments

change in quantity supplied

a change in quantity supplied of a particular good or service as a result of a change in price

change in demand

a change in the quantity people are willing to buy if something other than price changes

demand schedule

a chart that describes the correlation between quantity demanded for each price

supply schedule

a chart that describes the correlation between quantity supplied for each price

sole proprietorship

a company owned by a single individual

single-family home

a home that is not connected to any other building or structure

corporation

a legal entity distinct from its owners that is licensed by the government to conduct business

nonprofit corporation

a legal entity whose goal is to meet needs rather than earn a profit

flexible-rate mortgage

a loan in which the mortgage payments, interest rate, and the term of the loan can fluctuate at any time

stock exchange

a marketplace where stocks are bought and sold

price ceiling

a maximum price for a good or service set by the government

13) In 2008, about how many banks participated in the Federal Reserve System?

about 3,040

Q2) An agreed-upon scale of worth for goods is a unit of ______.

account

Q3) This is what remains after all accounting costs have been paid.

accounting profit

Q3) Which answer is a long-term decision for an automobile company?

adding an assembly line to build a new model of automobile

deposits

additions of new capital (money) to an account (includes checkings, savings, and time deposits)

balanced budget

an economic condition in which government expenses are equal to revenue

budget surplus

an economic condition in which government revenue exceeds expenditures

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

e-check

an electronic version of a paper check

e-cash

an electronic version of paper money

barter

an exchange of a good or service for another good or service; depends upon a double coincidence of wants (the idea that both trading partners have something the other wants and are willing to give it up)

Specie Circular

an executive order requiring that the purchase of public land be made in gold or silver

cartel

an international monopoly that controls and regulates a particular product, such as OPEC and the world supply of oil

stock

an investment representing a share of ownership or value of a publicly traded company

security

an item of value promised to a lender if a loan is not repaid

charity

an organization established to help people in need

legal entity

an organization or group recognized as such by the government

free enterprise system

another word for the capitalist system; an economic system in which people have the freedom to buy and create business, controlling the factors of production; also comprised of competition and private property

revenue bills

any bill passed by the House of Representatives to potentially raise money for government operations

explicit cost

any cost a company has to pay with money, such as land, labor, or entrepreneurship

tax

any measure of collecting revenue by the government from the people to help pay for various services or government actions

roud lot

any multiple of 100 stock shares

money

anything that is generally accepted by a society as a means of payment

Q2) Amenities, various contracts, and month-to-month arrangements are advantages of renting a(n) _______.

apartment

1) A(n) _______ is a payment charged for processing an application.

application fee

commercial bank

authorized by the Comptroller of the Currency of the U.S. Department of the Treasury; a financial institution that accepts deposits and makes loans

Q1) What segment of U.S. society represents a challenge to the Social Security system?

baby boomer generation

Q3) A(n) _____ budget exists when government revenues and expenses are the same.

balanced

1) _______ an institution that safeguards, lends, and exchanges money ______ an addition of new capital (money) to an account (includes checkable, savings, and time deposits) ________ backed by a valuable item such as gold ______ anything that is generally accepted by a society as a means of payment ______ a representation that shows ownership of a business or loan; includes stocks and bonds ______ the practice of lending money at extreme interest _______ something such as livestock that has a value apart from its value as money _______ in banking, the removal of capital (money) from a bank

bank deposit representative money money security usury commodity money withdrawal

Q1) During a(n) _____, the borrower gives up any valuable property in order to pay off his or her lenders.

bankruptcy

10) Why is the pursuit of profit legitimate?

The pursuit of profit is legitimate because everyone has a right to earn a living, and entrepreneurs and companies take on risk when they provide goods and services.

4) Select THREE facts about mutual funds.

They were created with the goal of helping investors benefit from diversification and the skill of expert money managers. They are pools of funds collected from investors and are invested by a money manager. They encourage regular, small investments and may charge a load for each transaction.

3) Select TWO reasons that investors should avoid too little risk.

Too little risk will not fully harness the power of compound interest. Inflation might chip away at purchasing power more quickly than the investment will grow.

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

1) ________ the process of a borrower giving up any valuable property in order to pay off lenders ________ a bank account that allows customers to pay for items in stores or through the mail with paper "tickets" or electronic transfers that are drawn directly from the funds in said account ________ resisting the temptation to receive an immediate reward, and waiting instead for a later, greater reward ________ the income the lender receives from loaning money ________ the length of time after which a loan or CD must be repaid ________ a type of savings account that offers a higher interest rate but requires a higher balance and deposits ________ an account that provides a means to hold money with a minimal interest rate ________ a type of savings account that pays higher interest but does not allow the premature withdrawal of money without paying a penalty

bankruptcy checking account delayed gratification interest maturity money market account savings account time deposits

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

Q2) Goods are sold for illegally high prices in _____ markets outside of government supervision.

black

8) A(n) ________ is a form of loan that the debtor is legally responsible to repay with interest by a certain date.

bond

2) Banks serve as centers where many individuals can combine their money to create a large pool of ______.

capital

Q1) One benefit of banks is that individuals create large pools of ________.

capital

Q3) All the equipment used to make a new business product is part of a company's _______.

capital

depreciation

capital's loss of value due to wear and tear; opportunity cost a company incurs when using its capital

Q2) A maximum price for a good or service is a price _____ set by the government.

ceiling

Q2) A(n) _________ is not money, but merely authorizes banks to transfer money.

check

Q1) A(n) ____ allows bank customers to keep track of their balances as they make transactions.

check register

Q1) A(n) ______ account allows customers to pay with paper "tickets" or electronic transfers drawn directly from the account.

checking

Q1) Consumers have the right to ________ what to buy in a market economy.

choose

Q2) Which of the following would be considered currency?

coins

1) _______ designed to pay for repair or replacement of an automobile that is in an accident ________ designed to protect against all types of damage or destruction to an automobile, including "acts of God" ________ provides financial assistance for the cost of medical care ________ designed to cover a house, the belongings within, or any accident that may occur on the property ________ provides benefits if a worker is unable to work ________ a policy that is designed to protect damages to other people or property in the event of an automobile accident ________ pays out a specified amount if the insured person dies during a limited period of time ________ an insurance product that has both insurance and investment components that pays out when the policy holder dies ________ an organization established to help people in need ________ a periodic payment for an insurance product

collision insurance comprehensive insurance health insurance homeowners insurance disability insurance liability insurance term life policy whole policy charity premium

8) Use the Comparison of Economic Systems chart to choose the best answers. Which system provides little chance to succeed or gain wealth?

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

3) A(n) ________ loan offered by banks is used to assist in the creation of a small business or to help in the advancement of that business.

commercial

Q2) In order to operate, a _______ bank must be authorized by the Comptroller of the Currency of the U.S. Department of the Treasury.

commercial

Q3) A(n) ______ is interchangeable with other goods of the same kind.

commodity

commodity money

commodity such as livestock that has worth apart from its value as money

5) When there is a lack of _______, entrepreneurs and companies may try to take advantage of consumers.

competition

Q1) When there is a lack of ______, businesses are more likely to take advantage of consumers.

competition

Q2) ______ insurance protects against all kinds of damage, including "acts of God."

comprehensive

Q1) ________ expenditures measure spending done by consumers to purchase clothing, food, household goods, and appliances.

consumption

Q1) Your _____ history will determine if you are able to purchase some big-ticket items.

credit

11) Your ability to buy certain big-ticket items depends on your ________.

credit score

2) A visual representation of the demand schedule, a demand ________ shows the progression of quantity demanded of a good or service and the price of that good or service.

curve

11) One way the government can fix a budget deficit is by ___.

cutting back on spending

Q1) Which answer is NOT a good strategy for paying off debt?

declare bankruptcy

1) The amount of a good or service that consumers are willing and able to purchase at a specific time is the ______.

demand

Q1) Quantity _____ is the amount of a service or good that consumers are able and willing to purchase at a specific time.

demanded

11) A(n) _________ of scale occurs when facilities and workforce increase by the same percentage but output increases by a smaller margin and total costs increase.

diseconomy

Q3) A company may pay a(n) ______ out of earnings to stockholders.

dividend

8) Without private property rights, people ___.

do not have an incentive to invest or work

5) When a business increases its facilities and workforce by the same percentage, and output increases by a larger margin while costs decrease, the business has a(n) _________ of scale.

economy

Q3) A(n) _______ occurs when a business increases its facilities and workforce by the same percentage and output increases by a larger margin while costs decrease.

economy of scale

Q2) Which of these is NOT a characteristic of a command economic system?

encouragement of the pursuit of wealth

Q3) A legal ______ is a group or organization recognized by the government as such.

entity

Q1) When did the US government begin its involvement in the economy?

late 1800s

Q2) Every state requires drivers to have ________ insurance.

liability

Q3) Luther owns a tutoring business. In 2017, he decides he needs an economic profit of $70,000 in order to open a new location in 2018. Consider the following information about his business during 2017: He spent $5,000 on new computer software for mathematics. He spent $15,000 in wages. He made $80,000 in total revenue. He spent $3,000 paying bills. He paid $2,000 interest on a loan. Which expense is an implicit expense?

loan interest

Q3) Investors who take too little risk might _____.

lose purchasing power and miss out on the power of compound interest

Q1) The importance of the right to private property is the ability to _______.

make profit in the sale or operation of private property

Q2) The ______ utility typically decreases as the buyer consumes one more additional good or service.

marginal

7) Use the Comparison of Economic Systems chart to choose the best answers. Which system has profit as a primary motivating factor?

market

Q1) A loan or CD must be repaid when it reaches ______ after a certain period of time.

maturity

Q1) _______ This type of savings account offers a higher interest rate but requires a higher balance. ________ This term describes waiting for a later, greater reward by resisting the temptation to receive an immediate reward. ________ This agreement is reached by a buyer and seller to exchange services and goods. ________ This compares two sets of records to ensure accuracy. ________ If a loan is not repaid, a lender may claim this promised item of value. ________ Banks periodically send out this record of activity within one's account.

money market delayed gratification transaction reconciliation security statement

9) When the marginal product of adding a worker is a greater loss than the loss of the marginal product of the last worker hired, a business experiences _________ marginal returns.

negative

Q3) Luther owns a tutoring business. In 2017, he decides he needs an economic profit of $70,000 in order to open a new location in 2018. Consider the following information about his business during 2017: He spent $5,000 on new computer software for mathematics. He spent $15,000 in wages. He made $80,000 in total revenue. He spent $3,000 paying bills. He paid $2,000 interest on a loan. Can Luther open a new location for his tutoring business?

no

Q3) _______ profit is the minimum profit matching what could be gained by doing something else.

normal

4) _______ prepares an annual budget that is presented to Congress ______ lends money to banks and thrift institutions ______ supervises banks and thrift institutions ______ controls the money supply and issues currency ______ negotiates financial treaties with other countries ______ acts as the agent of the United States' economic policy ______ establishes tax rates

not a function function function function not a function function not a function function

unit of account

one of the three functions of money; an agreed-upon scale of worth for goods and services

Q1) The free enterprise system is based primarily upon the right of Americans to ________.

own their own business

13) Select FIVE factors taken into consideration when a credit score is calculated.

pank bankruptcies length of credit history credit utilization timeliness of payments opening and closing accounts

currency

paper money (notes) and coins

Q3) _________ The work, risk, losses, and profits are divided between multiple owners. _________ Small businesses are the likely beneficiaries of this business structure that protects the owner from personal liability. _________ The owner has freedom, but also has trouble getting loans and is subjected to personal liability. _________ Stockholders who own the company are not directly liable for company actions.

partnership limited liability sole proprietorship corporation

7) _______ loans are offered by independent businesses as an advance on the customer's paycheck.

paycheck

Q1) ________ loans are undesirable because they involve very high interest rates and fees.

paycheck

Q1) _____ competition in a free enterprise system creates the best environment for consumers' freedom and security.

perfect

equilibrium price

price at which quantity demanded is equal to the quantity supplied

12) _________ a maximum price for a good or service set by the government _________ a market outside of government supervision where goods are sold illegally _________ a minimum price for a good or service set by the government _________ a market condition in which demand is greater than supply _________ price where quantity demanded is equal to the quantity supplied _________ the point of balance between quantity demanded and quantity supplied _________ a market condition in which supply is greater than demand _________ the amount consumers buy and producers sell at the equilibrium price

price ceiling black market price floor shortage equilibrium price market equilibrium surplus equilibrium quantity

2) Select FIVE sources of scholarships.

private companies colleges nonprofit organizations employers professional organizations

1) _________ is the right of Americans (or anyone) to own property and to sell it for profit.

private property

Final goods and services

produced goods that are consumed rather than used as a part of another good

6) The average of total products produced divided by the number of workers measures _________.

productivity

4) All Americans are allowed to pursue _____ as far as their creativity, talent, and hard work allow.

profit

Q2) The French word for a member of the working class is _________.

proletariat

Q1) In a market or free enterprise economy, competition ensures ________.

reasonable prices and consumer choice

8) Which of these does competition ensure in a free enterprise economy?

reasonable prices and options for different goods and services

change in supply

refers to any change in the quantity supplied when an influence other than price is present

Q3) The power of creating monetary policy is the power to _____.

regulate how much money is in circulation in order to influence the economy

11) Which of these falls under the category of thrift institution?

savings bank

Q3) A bond issued and backed by the government is called a government ______.

security

2) A fee that is collected by a rental agency or individual to protect against any possible damage to the property is called a(n) _______.

security deposit

13) ________ a brief time frame in which a decision is made and land, capital, and entrepreneurship costs are fixed but labor is a variable ________ the cost of the factors of production used by the company ________ the total of all expenditures a business makes including the depreciation of any capital (equipment used to make the new business product) ________ the sum of the total revenue of a company minus the total cost ________ any easily identifiable cost a company has to pay with money such as land, labor, or entrepreneurship ________ what remains for a company once all accounting costs are paid ________ the manufactured goods and equipment used to make a new business product ________ a time frame in which a decision is made and all costs associated with the factors of production (land, labor, capital, and entrepreneurship) are variable ________ the minimum level of profit to match what could be gained by doing some ________ the loss of value to capital due to wear and tear ________ the costs associated with the use of the factors of production but not paid with money ________ what is given up when a company decides to commit its resources to another course of action

short term total cost accounting cost economic profit explicit cost accounting profitt capital long term normal profit depreciation implicit cost opportunity cost

law of supply

states that as prices go up, quantity supplied of that product also rises, supply increases, and the supply curve shifts to the right; also states that as prices decrease, quantity supplied also decreases for that product, which will shift the supply curve to the left

law of demand

states that as prices increase, people are less likely to buy that product, demand drops, and the demand curve shifts to the left; also states that as prices decrease, demand will increase for that product, which will shift the demand curve to the right

3) ____ is the ability of money to hold its value while not being spent.

store of value

Q2) _______ life insurance will only pay a benefit if the insured person dies within a certain time period.

term

personal liability

that legal responsibility of an individual regarding the actions of his or her business

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

14) Who appoints the members of the Board of Governors?

the President of the United States

quantity supplied

the amount one is willing to sell or capable of selling at any given time and price

productivity

the average of total products produced divided by the number of workers

discount rate

the interest rate with which the Federal Reserve System loans money to member banks (This is normally indicative of the interest rates banks charge customers for loans.)

maturity

the length of time after which a loan or certificate of deposit must be repaid

bankruptcy

the process of a borrower giving up any valuable property in order to pay off lenders

conspicuous consumption

the purchase of normal goods to display wealth rather than meet real needs

Q3) Those suffering from the 1873 depression pushed for ______.

the reissue of greenback dollars from the Civil War

Barter System

the trading of one item to receive another item; creates a double coincidence of wants

vvv Lesson 1 vvv

vvv Lesson 1 vvv

opportunity cost

what is given up when a company decides to make a decision with its resources

accounting profit

what remains for a company once all accounting costs are paid

diseconomies of scale

when facilities and workforce increase by the same percentage but output increases by a smaller margin and total costs increase

Q1) The taking over of a home by a lender once a homeowner can no longer pay for his or her home loan is a(n) ______.

foreclosure

2) The protection of private property is essential to the ______ system.

free enterprise

Q2) Homebuyers show they are serious by ____ before shopping for a home.

getting pre-approved for a loan

complement good

goods or services that are used together; normally, a decrease in the price for one good will increase the demand for the other good

6) What is the current price of an ounce of gold?

$1,917.30

3) In 2005, the Bureau of Economic Analysis and the U.S. Department of Commerce reported the following statistics: government expenditures $2.50 trillion imports $2.03 trillion government debt interest $3.05 trillion consumption expenditures $8.79 trillion investments $2.53 trillion exports $1.31 trillion What is the gross domestic product?

$13.10 trillion

Q1) The U.S. government debt in 2015 was about _______.

$14 Trillion

7) In 2015, how much debt did the U.S. government have?

$14 trillion

2) Jennifer owns a crafts shop. Consider the following information about one year in her shop: She spent $10,000 on new equipment to make pottery. She spent $30,000 in wages. She took out a $10,000 loan at 3% interest. She made $200,000 in total revenue. She spent $15,000 paying bills. What is Jennifer's economic profit for the year?

$144,700

Q3) Luther owns a tutoring business. In 2017, he decides he needs an economic profit of $70,000 in order to open a new location in 2018. Consider the following information about his business during 2017: He spent $5,000 on new computer software for mathematics. He spent $15,000 in wages. He made $80,000 in total revenue. He spent $3,000 paying bills. He paid $2,000 interest on a loan. What is Luther's economic profit?

$55,000

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) 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

4) Determine the current CPI compared to 2010 using the CPI formula. 2010: CPI basket is $123.25. Today: CPI basket is $154.67. What is the CPI?

125.49

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

3) If you own 300 shares of a company that has 5,500 shares, what is your percent of ownership?

5.45%

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) Which philosopher is most associated with a free-market economy based on self-interest?

Adam Smith

2) In ________, the possibility exists for a person to achieve business success mostly free of government regulation or to fail miserably and spectacularly in the attempt.

America

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) Which of the following would be a final good?

An airline purchases ten airplanes from a manufacturer.

4) Select FOUR facts about the law of supply.

As prices decrease, quantity supplied will decrease for that product. As prices decrease, the supply curve shifts to the left. As prices go up, quantity supplied of that product will also rise. As prices go up, supply increases and the supply curve shifts to the right

12) Select TWO facts about the law of demand.

As prices increase, people are less likely to buy that product and demand drops. As prices decrease, demand will increase for that product

7) Why might a homebuyer choose not to use all of the credit extended by a lender?

Banks might agree to loan a homebuyer more than he or she can reasonably handle.

Q1) The ______ is an organization that works to protect consumers.

Better Business Bureau

8) Match the organizations and indexes with the descriptions. _________ a stock exchange noted for its trading of agricultural and livestock goods _________ an electronic stock exchange that has historically emphasized technology companies _________ this American stock exchange is the largest in the world _________ a stock index that tracks hundreds of the largest publicly traded U.S. companies _________ an index tracking the stock performance of 30 selected large companies

Chicago Mercantile Exchange NASDAQ New York Stock Exchange (NYSE) Standard & Poor's 500 Index Dow Jones Industrial Average

1) Select FIVE general types of items that are included in the CPI basket.

Clothing Education Food Mortgages/Rent Utilities

Q2) ________ originated in the ideas of Marx and Engels that taught that all citizens should have the same wealth and social standing.

Communism

10) Select FOUR facts about the Federal Reserve.

Congress can review Fed activities and create laws to change its responsibilities. It is a private organization that works within the government. It is the central bank of the United States. It moderates the ups and downs of the business cycle.

Q2) Which difficulty faces producers if they reduce the size or portion of a product?

Consumers will be less likely to buy the product because they will derive less utility from the product.

4) Why would a credit union appeal to a depositor?

Credit unions are member-owned and return any profit to members.

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

3) Select THREE facts about time deposits.

Depositors benefit by receiving higher interest rates. Another name for a time deposit is a certificate of deposit (CD). Banks benefit by knowing the money will not be withdrawn before a certain date.

Q2) _____ insurance is designed to help workers who are not physically able to work.

Disability

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

1) What is the role of modeling aggregate supply and aggregate demand?

Economists can use aggregate demand and supply models to determine the real GDP and study cause and effect relationships within an economy.

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

4) Select FOUR reasons stocks tend to increase in value over time.

Employees add value through their labor. New ideas help make businesses more profitable. Technology increases profits by allowing businesses to work more efficiently. Businesses take advantage of trade to open new markets.

2) Select FOUR principles to follow when investing.

Evaluate your tolerance for risk. Pay attention to commissions and fees. Rebalance your investments every year. Diversify your investments.

3) The _______ is determined by a formula and represents the amount of college costs for which a family is responsible.

Expected Family Contribution

10) _______ costs are opportunity costs because every dollar spent could have been spent on something else.

Explicit

Q2) The federal government has insured _______ loans since they were created as part of a New Deal program.

FHA

7) The part of the Fed that makes the economic policies that run the economy is the ___.

Federal Open Market Committee

6) Which government agency deals most directly with consumers in how it protects their rights?

Federal Trade Commission

Q1) Which government agency deals most directly with consumers and their rights and protection?

Federal Trade Commission

5) Which organization does NOT work for consumers?

Federal Treasury

8) What is a danger associated with using federal loans to pay for college?

Federal loans are easier to get than other types of aid. Since they are only taken out as needed and do not have to be repaid until a later date, many students find repayment to be a real burden after leaving school.

Q1) In which amendment can one find the "Takings Clause"?

Fifth Amendment

6) Which answer is an example of competitors colluding to artificially set prices?

Food vendors at a state fair agree to set similar prices.

4) If you wish to pursue grants, work-study, or loans, the first step is to fill out the ________.

Free Application for Federal Student Aid

Q2) Filling out the ____ is the best way to pursue federal loans, grants, and work-study.

Free Application for Federal Student Aid

6) Explain Friedrich Hayek's view regarding government intervention in the economy.

Friedrich Hayek believed that the economy is better left to sort itself out than be subjected to government intervention. He held that if the government intervenes, there may be unintended negative consequences.

Formula for GDP

GDP is calculated by adding consumption expenditure, investment, government expenditure, and net exports; Y = C + I + G + NX.

1) During the Revolutionary War, Alexander Hamilton worked as an assistant to ______.

George Washington

11) In 2013, a controversy developed in Irwindale, California, between owners of a hot sauce factory and neighboring residents. The problem centered on strong smells that spread from the factory due to the processing of peppers to create the hot sauce. Residents reported a burning sensation in their throats and eyes caused by the pepper odors. The owner of the factory defended himself by pointing to the fact that his factory provided many jobs and much revenue for the city. What should the government consider before creating a regulation to resolve this situation?

Government regulation, if warranted, should have a specific and clear purpose.

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.

3) Select FOUR important steps to purchase a home.

Hire an expert to do a home inspection. Select a real estate agent. Get pre-approved for a loan. Make arrangements for utilities and insurance.

2) Choose F for Final good or service, or I for Intermediate good or service. ________ tires manufactured for use by a neighboring automobile assembly plant ________ a steak at a restaurant ________ laptop computers ________ A furniture maker purchases cut boards to make a table. ________ A rancher buys ten horses to help manage cattle on a ranch.

I F F I I

Q1) _______ is the income the lender receives from loaning money.

Inerest

6) Which of these was the result of the Fed responding to the 1969 recession by putting more money into circulation?

Inflation became a problem throughout the 1970s and 1980s.

2) Use the chart to answer the question. When the Fed sells securities, which of the following happens?

Interest rates increase.

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.

2) a new company started by an entrepreneur

It established that the government had a duty and right to regulate the economy. It only applied to interstate laws and was weak and easily avoidable. It was signed into law by President Harrison in 1890

Q1) What was the significance of the Supreme Court case Kelo v. New London (2005)?

It gave the government more power in practicing eminent domain.

10) Select THREE facts about the International Monetary Fund (IMF).

It has 188 countries as members. The fund seeks to secure international financial stability. It seeks to promote growth and reduce poverty.

7) What impact does a college education have on future earning potential?

It has been clearly demonstrated through historical data that workers with a college education usually earn much more than those without it.

2) Select THREE facts about the free enterprise system.

It must allow for competition and private property rights. It is another word for the capitalist system. People have the right to own their own businesses and to control the factors of their production.

Q2) Which of these differentiates a credit union from other financial institutions?

It only serves a certain group of people.

7) Which actions did the Fed take during the 2008 "Great Recession"?

It reduced the reserve requirements and lowered the discount rate to stimulate economic growth.

4) Select THREE things to consider when supporting a charity.

Keep track of all charitable donations. Choose whether to volunteer, donate goods, or donate money. Investigate the trustworthiness of organizations or groups that claim to help your cause.

7) The power of the government to take private property was extended in 2005 with the ___ Supreme Court case.

Kelo v. New London

5) ___ is something that is accepted in return for a good or service.

Medium of exchange

Q2) In which part of the world can one find the first evidence of banking-like institutions?

Mesopotamia

Q3) The Federal Reserve bank responsible for beginning all Fed policy is based out of ___.

New York

9) Select THREE facts about an individual retirement account.

Only people who earned income may contribute to an IRA. It is a retirement savings account to which individuals may make tax-deferred contributions. As of 2015, the limit of annual contribution is $5,500.

Q1) Choosing between spending money on a new suit or a vacation is an example of _____.

Opportunity Cost

Q3) Which answer is NOT a reason stocks generally appreciate in value over time?

Over time, most investors hold on to stocks, creating scarcity and driving up prices.

7) _______ allows the greatest freedom and security for consumers.

Perfect competition

2) The ___ movement resurrected the call for a new national bank.

Progressive

Q3) The _____ movement was instrumental in the creation of the Federal Reserve System.

Progressive

2) President ___ took the United States off of the gold standard in 1971.

Richard Nixon

Q2) Who was the major obstacle to the spread of banking in Europe during the 1500s?

Roman Catholic Church

10) Individuals will not owe tax on any earnings withdrawn after age 59 ½ from a ________ individual retirement account.

Roth

Q1) Which country's collapse greatly altered U.S. military spending?

Russia

4) _______ is the problem that arises due to limited resources and unlimited wants.

Scarcity

2) ______ is a visual representation of the supply that shows the progression of quantity supplied of a good or service and the price of that good or service.

Supply curve

3) _____ is a chart that describes the correlation between quantity supplied and price.

Supply schedule

1) Complete the acronym TRIBE ______ Tastes and Preferences ______ Related goods and services ______ Income ______ Buyers and Price ______ Expectations

T R I B E

5) ________ Megan pays more for a certain brand of tea because it tastes better to her. ________ Justin delays buying a smartphone, hoping that he can purchase one for less in a holiday sale next month. ________ Katy tries to sell her laptop computer on a website that has many visitors. ________ Though hoping for an iced tea, Mya happily drinks the ginger ale offered by her friend.

Tastes and Preferences Expectation Buyers and price Related goods and services Income

2) What prevented banking services from emerging sooner in Europe?

The Catholic Church did not approve of charging interest on borrowed money.

4) ____ is a pamphlet of communist economic thinking that highlights the need for a new type of government and economy.

The Communist Manifesto

8) Which statement is a criticism of the Fed's actions to stabilize the economy during the 2008 financial crisis?

The Fed might have moved into a position where there will be little it can do during the next crisis.

4) Which of these was the Fed's response in the early stages of the Great Depression?

The Fed took no action.

3) Select TWO facts about the Clayton Antitrust Act.

The Federal Trade Commission (FTC) was created by the Act. It broke up some harmful monopolies while leaving others alone.

Q2) What was the impact of the gold and silver the Spanish and Portuguese discovered in the Americas during the 1500s?

The amount of gold and silver devalued the worth of the world supply of the materials.

6) Describe what aspect of TRIBE is at play in the impact of the bison meat market.

The biggest issue is related goods and services since the bison meat is a substitute good for other meat products.

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.

8) In general, what happens to equilibrium quantity and price if both demand and supply decrease?

The quantity decreases while the price change is unknown.

7) In general, what happens to equilibrium quantity if demand and supply increase?

The quantity moves higher.

5) Which of these was the result of the Fed lowering the reserve requirement during the 1950s?

The result was an economic boom.

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.

1) ________ In the United States, anyone can sell anything they want, within certain limits. (t) _________ The government often interferes in the economy on behalf of business owners. (f) ________ The free-market economy allows citizens to decide upon and control the factors of production. (t) ______ A certain amount of government regulation is a part of a true market economy. (t) ______ One factor that leads people to operate their own business is the pursuit of profit. (t)

True False True True True

partnership

a company owned by two or more people with no board or corporation in support

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

credit score

a cumulative score that rates one's level of risk to a lender when borrowing money

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

deflation

a decrease in prices due to decreased spending

security deposit

a fee that is collected by a rental agency or individual to protect against any possible damage to the property; usually given back to renter upon moving, provided no damage or other issues arise

hard currency

a form of currency such as gold or silver that is more durable than paper currency

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

12) The Fair Credit Reporting Act (FCRA) requires the three major credit tracking agencies to provide you with ________ upon request.

a free credit report once every 12 months

inferior good

a good or service that will see a decrease in demand as income increases and an increase in demand as income decreases

normal good

a good or service that will see an increase in demand as income increases

Q1) Which scenario does the graph represent?

a grocery store's reduction of ice cream inventories as winter approaches

standard fixed-rate mortgage

a home loan in which mortgage payments, interest rate, and the terms of the loan are fixed for the duration of the loan

consumer price index

a measure of the amount of money required to buy a set list of basic goods (called CPI market basket) in comparison to a base year

stock index

a measurement of the performance of a particular stock market or a defined segment of a market

constitutional convention

a meeting to create a new constitution

savings and loan association

a member-owned financial institution that accepts checkable and savings deposits and makes loans

credit union

a member-owned financial institution that provides banking services to a particular group of people

economic perspective

a method of making economic decisions by first weighing the benefits and costs associated with each measure

price floor

a minimum price for a good or service set by the government

Q1) What is a startup?

a new business created by

startup

a new business created by an entrepreneur

12) Which of these will likely experience the most depreciation over 10 years?

a new computer

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

pursuit of profit

a part of the free enterprise system that provides an incentive for business owners to provide products and services

application fee

a payment charged for processing an application

down payment

a payment representing a buyer's intent that is only a percentage of the full purchase price

premium

a periodic payment for an insurance product

check register

a personal record that gives bank customers a way of keeping track of their checking account balance

dividend

a portion of a company's profit distributed to shareholders

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

bank statement

a report in which the bank informs its customers what account activity the bank has on record

security

a representation that shows ownership of a business or loan; includes stocks and bonds

inflation

a rise in price due to the currency's lower value

townhomes

a row of individually owned houses that share walls

time deposit

a savings instrument that pays higher interest but restricts when funds may be withdrawn

business cycle

a series of economic expansions and contractions

commission

a service charge for investment advice or transaction

treasury bill

a short-term security sold by the Department of the Treasury that is generally considered very safe but offers a low yield in return

Circular flow model

a simplified illustration of the movement of money as expenditure and income throughout the economy

collusion

a situation in which competitors work together to artificially set prices

8) Which answer is not an example of capital?

a stack of $100 bills

scholarship

a sum of money that is used to pay educational expenses; awarded to a student based on merit or need

Traditional Economic System

a system under which people within a community perform the same economic functions as their forefathers and ancestors ____________.

property tax

a tax assessed against the value of the home and the land it sits on

tariff

a tax on imported goods

5) Which answer is NOT an example of a commodity?

a television with new special features

thrift institutions

a term to describe savings and loan associations, savings banks, and credit unions

long term

a time frame in which a decision is made and all costs associated with the factors of production (land, labor, capital, and entrepreneurship) are variable

short term

a time frame in which a decision is made and land, capital, and entrepreneurship costs are fixed, with labor as a variable

Q3) The lowest period for a country's GDP is called _______.

a trough

manufactured home

a type of mobile home that can be placed and transported at will

6) What is the main factor that limits an American's ability to own a successful business?

age

Q1) What is the major obstacle for Americans to own their own businesses?

age

Q3) Which of these would NOT add to the GDP of the United States?

an American-based investment firm in Switzerland

stock symbol

an abbreviated symbol of one to four letters that is used when trading a stock

monopoly

an absence of competition within a particular market of a good or service

transaction

an agreement between a buyer and seller to exchange goods or services

federal budget

an annual account of government revenue and expenditures

condominium

an apartment-like dwelling in which units are individually owned and costs of maintaining common grounds are shared

3) Which items are NOT substitute goods?

an automobile and a dump truck

budget deficit

an economic condition in which government expenditures exceed revenue

9) Which of these describes the function a debit or credit card serves when it is used to purchase something?

an identification card to approve transfers

Q2) Which role do credit and debit cards play when they are used to make a purchase?

an identification card to approve transfers

National Bureau of Economic Research

an independent and private organization that tracks the actions of the business cycle

stimulus

an injection of money into circulation to try and stimulate economic growth

bank

an institution that safeguards, lends, and exchanges money

whole life policy

an insurance product that has both insurance and investment components

term life policy

an insurance product that pays out a specified amount if the insured dies during the term of the policy

Rational choice

behavior that is dependent upon associated benefits and costs and a decision made based on maximum benefit

1) _________ a debt investment in which an investor loans money to be repaid with interest _________ a marketplace where stocks are bought and sold _________ affected by fluctuations in the exchange rate of currencies, which can influence one's investments _________ a basic good that is interchangeable with other commodities of the same type _________ one who owns a stock (or a share) of a public company _________ a bond issued by the government and backed by the country's credit _________ an investment representing shares of ownership or value of a publicly traded company _________ a short-term security sold by the Department of the Treasury that is generally considered very safe but offers a low yield in return _________ a measurement of the performance of a particular stock market or a defined segment of a market

bond stock exchange foreign markets commodity stockholder government security stock treasury bill stock index

1) _________ a person who serves as a middleman between the investor and the market _________ a company that allows for shares of ownership to be publicly traded _________ investment in an established company that maintains a growing or even stock performance _________ a service charge for investment advice or transaction _________ any multiple of 100 stock shares _________ a portion of a company's profit distributed to shareholders _________ a company that does not allow the trading of its ownership by stockholders; does not trade publicly _________ a person who can help you come up with a sound plan for saving and investing _________ handles investment transactions and keeps track of your investments in an account

broker public company safe stock commission round lot dividend private company financial advisor brokerage

Q3) Most investors use a ____ to handle investment transactions, track investments, and receive statements on a regular basis.

brokerage

Q3) Which answer is NOT an economic tool of the Federal Reserve?

budget line-item veto

Q3) A(n) _____ is a charge for a financial transaction or advice.

commission

reconciliation

comparing two sets of records to ensure accuracy

4) ___ is the struggle for supremacy between rivals that provide the same product or service as another company.

competition

Q2) _________ apartment-like dwelling of which homeowners can own individual units _________ a home not connected to any other buildings that embodies the ideal of the American Dream _________ an economical residence made of lesser-quality materials susceptible to storms _________ a residence that has a small backyard and front porch and shares walls with other homes

condominium single-family home manufactured home townhome

8) Banks offer _______ loans to individuals to meet personal or household needs.

consumer

Q1) The key to the market economy is that basic economic decisions are ultimately made by ______.

consumer

5) One's _______ cumulatively rates one's level of risk when borrowing money.

credit score

1) ________ paper money (notes) and coins ________ an exchange of a good or service for another good or service; depends upon a double coincidence of wants _________ M1 plus savings deposits, time deposits, and money market funds, as well as any other type of deposit _______ an electronic version of paper money _______ an electronic version of a paper check _______ money that is recognized and ordered to be such by a government _______ the total amount of money held by individuals and companies, as well as travelers' checks and checkable deposits owned by individuals and companies ______ a way in which to pay off a debt _______ this term refers to anything that is generally accepted by a society as a means of payment

currency barter M2 e-cash e-check fiat M1 means of payment money

Q3) A recipe for fixing a budget deficit is for the government to __________.

cut expenditures

11) In which Federal Reserve district do you live?

dallas

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

Q3) Which would be an example of contractionary fiscal policy?

decrease in government spending

10) When the marginal product of adding a worker is less than the marginal product of the last worker hired, a business experiences _________ marginal returns.

decreasing

Q1) A decrease in prices and increase in unemployment due to reduced spending is ______.

deflation

3) ________ a decrease in prices due to decreased spending, which also leads to unemployment ________ the tendency of people to respond to rising prices by buying cheaper substitutes of the particular good ________ a measure of the amount of money required to buy a set list of basic goods—a market basket—in comparison to a base year ________ failure to represent changes in the quality of goods in the CPI index ________ the worth of a currency in relation to what it can buy ________ failure to represent the greater value of new goods in the CPI index ________ the tendency to buy normal goods at reduced prices through places like outlet centers or online shopping

deflation commodity substitution effect consumer price index quality change effect purchasing power new goods effect outlet substitution effect

7) The total amount of goods and services demanded at a certain price level within a particular period of time is aggregate ________.

demand

5) A ___________ describes the correlation between quantity demanded for each price in a chart.

demand schedule

Q3) The loss of capital due to wear and tear is ______.

depreciation

Q1) Which items are NOT substitute goods?

desk and couch

1) _______ This determines the rate at which the Fed will lend reserves to commercial banks and thrift institutions. _______ This regulates the amount of deposits a bank keeps on hand in the form of money. ______ The Fed lowers this to spur spending or increases this to fight inflation. _______ This is the selling and buying of government securities to manage the economy and money supply. ______ Reducing this increases the amount of money banks have to lend. ______ This affects the amount of money that is in circulation.

discount rate required reserve ratio discount rate open market operations required reserve ratio open market operations

Q2) A(n) _______ payment is a percentage of the full purchase price and is meant to prove a buyer's intent.

down

3) What is perhaps the most important responsibility that consumers have?

educating themselves on products before making a buying decision

Q2) _____ Space inside safes was rented to others in order to protect gold. _____ Insurance and securities companies were allowed to offer banking services ______ Chinese merchants stored money in one place and used it in another. ______ If a bank closed, American depositors' money was guaranteed.

emergence of artisan bank introduction of the Gramm- ??? invention of "flying money" creation of the Federal De-

5) The term ________ refers to the government taking private property for the benefit of the community and city as a whole.

eminent domain

Q1) Which answer does NOT belong to the NICEJAG acronym?

end production

Q2) A medium of _______ is something accepted in return for a good or service.

exchange

Q3) An economy going from the trough to the peak is said to be in a state of _______.

expansion

Q3) A(n) _____ fiscal policy encourages economic growth through tax cuts, a decrease in industrial regulation, increased government spending, or a combination of factors.

expansionary

1) ______ fiscal policy that combines increased government spending and tax cuts to spur economic growth _______ fiscal policy that is created in response to the state of the economy _______ an economic condition in which government expenditures exceed revenue _______ fiscal policy that is created by an act of Congress _______ an annual account of government revenue and expenditures _______ the manner by which Congress and the President use the federal budget to direct the national economy ______ an economic condition in which government expenses are equal to revenue ______ the circulation of dollars that are supported by gold reserves ______ an injection of money into circulation to try and stimulate economic growth ______ an economic condition in which government revenue exceeds expenditures ______ fiscal policy that combines a reduction of government spending with tax hikes to curtail economic growth

expansionary fiscal policy

Q3) A(n) ______ cost, such as labor or machinery, is easily identifiable.

explicit

Q1) A free market economy allows citizens to control the _______ of production.

factors

Q1) The _______ requires the three major credit tracking agencies to provide you, upon request, with a free credit report every 12 months.

fair credit reporting act

11) The demand curve cannot move

false

6) True or False. Concerning future earning potential, the college you choose to attend is more important than your chosen field of study.

false

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

Subsistence farming

farming that is done simply to feed the family of the grower and not to sell goods for a profit

work-study

federally funded part-time employment for college students

Q2) The money that is established by law to be money is called ___.

fiat money

3) The constitutional protection of private property is found within the _______ Amendment.

fifth

Q1) _____ goods and services are consumed rather than used to create other goods.

final

Q3) A good ______ advisor can help you wisely manage your investments.

financial

contractionary fiscal policy

fiscal policy that combines a reduction of government spending with tax hikes to curtail economic growth

expansionary fiscal policy

fiscal policy that combines increased government spending and tax cuts to spur economic growth

discretionary fiscal policy

fiscal policy that is created by an act of Congress

automatic fiscal policy

fiscal policy that is created in response to the state of the economy

7)In the short term, total _________ costs are the cost of those factors of production that cannot be changed.

fixed

Q2) The mortgage and interest payments can fluctuate as interest rates change in a _________ loan.

flexible-rate

5) The absence of unemployment due to layoffs and similar causes is _______________________ employment.

full

Q1) Which of the following is required before a country can match potential GDP?

full employment

Q3) A(n) ___ is an example of a commodity.

gallon of milk

Exports

goods sent out by a country or company to be bought by foreign countries or companies; When considered with a country's imports, such earnings are counted toward gross domestic product and are symbolized as NX (net exports).

Imports

goods that a country or a company buys from foreign countries or companies; When subtracted from the total revenue from a country's exports, such spending is factored into gross domestic product and is symbolized as NX (net exports).

goods in joint supply

goods that are produced in conjunction with something else

alternative goods

goods that can be produced and supplied in lieu of another item

Q1) The amount of an employee's income before any deductions are made is the ________.

gross wages

Q1) Which portion of U.S. government spending took up the largest percentage of the 2016 budget?

healthcare

6) Which of the following would be a short-term decision for a grocery store?

hiring 30 more workers for 30 hours a week

4) A(n) __________ loan offered by banks is used to pay for a house.

home

1) ________ goods that a country or a company buys from foreign countries or companies ________ spending is done by firms and companies with the intent to help themselves grow or become more efficient ________ goods sent out by a country or company to be bought by foreign countries or companies ________ a simplified illustration of the movement of money as expenditure and income throughout the economy ________ produced goods that are consumed rather than used as a part of another good ________ spending is done by households and private individuals on household goods, appliances, and other goods such as clothing and food ________ produced goods that are required for the production of other goods ________ the total value of final goods and services produced within a particular year by citizens of a particular country ________ spending is done by governments at all levels ________ the total value of final goods and services produced within a particular country within a particular year

imports investments exports circular flow model final goods and services consumption expenditures intermediate goods and services gross national product government expenditures gross domestic product

Q1) A normal good is defined by its relation to _____.

income

Q1) Cutting back on money spent on a hobby because of increasing medical bills is an example of _____ affecting a change in demand.

income

Q2) The ______ effect impacts decisions a consumer makes when deciding what to purchase.

income

Q3) Marginal cost is a measure of the extent of the costs associated with ________.

increased production

1) _________ marginal returns occur when the marginal product of adding a worker is worth more than the marginal product of the last worker hired.

increasing

Q1) Which answer does NOT belong to the TRIBE acronym?

independent analysis

Q1) Demand for a(n) ____ good will fall as income increases.

inferior

Q3) The Fed's move to put more money into circulation in response to the 1969 recession led to ______ during the 1970s and 1980s.

inflation

Q3) When interest rates go down, bond fund prices go up because ___

investors will pay more for older bonds with higher interest rates

Q1) The Clayton Antitrust Act differed from the 1890 law in that _____.

it ended harmful monopolies and created the Federal Trade Commission

Q1) The importance of the Sherman Antitrust Act of 1890 is that _______.

it established that the government has a right to regulate the economy

Q3) President Andrew Jackson wanted to get rid of the Bank of the United States because ___.

it was not answerable to the public and had become too powerful

2) What a stock price really represents is _______.

its investor's expectations for the company's future profits and growth

7) Match each statement with the type of change in supply. _________ Leather and beef prices decline as ranchers raise more cattle. ________ The President announces a new program to help seniors pay for medicines. ________ Hotels are full after a tornado destroys homes in a nearby town. _________ The only railroad passing through town reduces the number of weekly trains. ________ A shoe factory converts from manufacturing tennis shoes to dress shoes in order to make a greater profit. _________ Residents buy canned goods and generators because an Atlantic storm might hit their community. _________ A shortage of steel leads to higher automobile prices.

joint supply government action natural or man-made disasters competition alternative goods expectations input

Q2) Which factor most impacts a person's future earning potential?

level of education

1) ________ a legal entity combining aspects of corporations, partnerships, and sole proprietorships that protects owners from personal liability ________ a legal entity distinct from its owners that is licensed by the government to conduct business ________ rules set by regulatory agencies that a business must follow ________ that legal responsibility of an individual regarding the actions of his or her business ________ a company owned by a single individual ________ a company owned by two or more people with no board or corporation in support ________ a legal entity whose goal is to meet a need rather than earn a profit

limited liability company (LLC) corporation regulations personal liability sole proprietorship partnership nonprofit corporation

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

Q2) ________ allows members to receive aid for college through the Montgomery G.I. Bill ________ enables college expenses to reduce one's tax burden dollar for dollar ________ money for education that must be repaid after one graduates or otherwise leaves school ________ direct aid based on eligibility that does not have to be repaid

military aid education tax credits federal loans grant

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

Q1) An increase in demand for a good related to an increase in income is characteristic of a(n) _____ good.

normal

2) Match the scenarios with the biases that can impact the CPI. ________ receiving a better value by purchasing items in an online auction ________ installing a GPS unit in your automobile to replace paper maps ________ buying handmade French bread at a special bakery instead of the sliced white bread in a typical grocery store ________ switching from takeout coffee to less-expensive soft drinks

outlet substitution effect new goods effect quality change effect commodity substation effect

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

9) _______ American Telephone and Telegraph (AT&T) _______ OPEC _______ U.S. Post Office _______ Solomon's Mines, home of the world's only purple diamonds

ownership monopoly cartel legal mono

4) ________ spreads the risk, work, and potential profit or loss between multiple owners ________ gives the owner the greatest freedom, but subjects the owner to unlimited personal liability and is the business type that has the most difficulty securing a loan ________ keeps individuals and stockholders who own the company from being directly held liable for the actions of the company ________ protects small-business owners from personal liability

partnership sole proprietorship corporation limited liability company (LLC)

Q1) ________ offered by independent businesses as an advance on the customer's wages ________ assists in the creation of a small business or to help in the advancement of that business ________ offered to individuals to meet personal or household needs ________ used to purchase private residences

paycheck loan commercial loan consumer loan home loan

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

oriented

positioned in a definite direction or arrangement

9) The real GDP at full employment is called the _______ GDP

potential

Q3) A(n) ______ company does not have or allow trading of its ownership by stockholders.

private

Intermediate goods and services

produced goods that are required for the production of other goods

4) The change that occurs to a company's total output as a result of a one-unit increase in the workers hired is marginal _________.

product

Q1) The pursuit of ______ is legitimate because entrepreneurs assume the risk of a business and need to provide for themselves and their families.

profit

Q2) Which answer is NOT a good way to help a charity?

provide a loan

6) "...nor shall private property be taken for ___________ use, without just compensation."

public

1) ______ a component of a free enterprise system that creates incentive for business owners to provide products and services _______ rivals that deal in similar products or services _______ complete control over a product or market with little or no competition _______ an industry with few competitors and high entry barriers _______ a situation in which competitors work together to artificially set ________ an international monopoly ________ creates a large market with many options for the consumers ________ a competitive advantage not legally or purposefully created ________ competitive advantage created or protected by law ________ a new company started by an entrepreneur

pursuit of profit competition monopoly oligopoly collusion cartel perfect competition natural monopoly legal monopoly startup

10) The ________ GDP includes the total value of all final goods and services expressed in the prices of a base year.

real

11) When used together, aggregate demand and supply reveal how much ___ will be demanded and supplied at different price levels.

real GDP

Demand

refers to the relationship between quantity demanded of a specific good or service and the price of that same good

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

6) Select the best answer.

rise

7) Which answer is NOT figured into accounting costs?

sales tax charged to cusotmers

Q1) A(n) _____ account is a place to hold money while earning minimal interest.

savings

1) _______ This member-owned financial institution encourages saving by accepting checkable and savings deposits and making loans. _______ A traditional bank, it is authorized by the Comptroller of the Currency of the U.S. Department of the Treasury, accepts deposits, and makes loans. ________ This financial institution only accepts savings deposits and makes loans to individuals. _______ This member-owned financial institution provides banking services to a particular group of people, such as a steelworkers union.

savings and l can association commercial bank savings bank credit union

Which of the following would be an example of a thrift institution?

savings bank

Q1) Which of the following is likely to shift the supply curve right?

scientists find a way to make solar panels more efficient at no extra cost

2) _______ is an item of value promised to a lender if a loan is not repaid.

security

Q2) A(n) ______ deposit is often taken to protect a rental agency or individual from damage caused by a renter.

security

2) ________ a home that is the most expensive and most difficult residence to maintain ________ an apartment-like dwelling in which units are individually owned and costs of maintaining common grounds are shared ________ an economical residence that does not always hold its value and is susceptible to storms ________ a city-based residence with a porch that is less expensive than a single-family home

single-family home condominium4

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 order for a country's economic condition to be considered a recession, the economy and GDP must be in decline for ___.

six months

Consumption expenditures

spending done by households and private individuals on household goods, appliances, and other goods such as clothing and food; symbolized by the letter "C"; one of four components in figuring gross domestic product (GDP)

Q3) _________ The stock performance of hundreds of America's largest companies are tracked by this index. _________ This basket of stocks or other investments may be traded in real time just like a stock. _________ Employers can match employee contributions to retirement savings. _________ This electronic stock exchange is home to many large technology company stocks. _________ Earnings from this account are not subject to tax if withdrawn after age 59 ½. _________ This stock exchange specializes in agricultural financial investments. _________ This account allows individuals with income to make tax-deferred investments for retirement. _________ The world's largest stock exchange is in America's largest city. _________ This index tracks 30 of the most important U.S. companies.

standard & Poor's 500 index exchange-traded fund (ETF) 401 (k) savings plan NASDAQ Roth individual retirement account Chicago Mercantile Exchange Individual retirement account (IRA) New York Stock Exchange Dow Jones Industrial Average

2) Which answer is NOT a function of money?

statement of deposit

Q3) A(n) ___ is an increase of circulated money that is meant to stimulate economic growth.

stimulus

Q3) The price of a(n) ____ represents investors' collective expectations of a company's future growth and profits.

stock

Q3) A marketplace where stocks are bought and sold is a(n) ______.

stock exchange

safe stock

stock in an established company that has shown little vulnerability to market forces and maintains a growing or even stock performance

Q2) The ability of money to hold its worth is a measure of its _________ of value.

store

Q1) A(n) ______ good can be used in place of another good.

substitute

Q2) A change of price of one good that affects demand for a similar good is the _____ effect.

substitution

Q3) A budget ______ is the economic condition that exists when the government takes in more taxes than they expend.

surplus

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

5) Select FOUR types of information needed to fill out the FAFSA.

tax records (If you are dependent, you will need your parent's or guardian's tax records.) records of assets, including savings and checking accounts and investments your Social Security number or alien registration number records of untaxed income such as child support received, etc.

Q2) Concepts of the market economic system stem from which movement?

the Enlightenment

New York Fed

the Federal Reserve bank tasked with implementing the Fed's monetary policy

Q2) Which event led to a more centralized banking system in the new United States?

the Revolutionary war

Q1) A lack of property rights contributed to the economic demise of ________.

the Soviet Union

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

equilibrium quantity

the amount consumers buy and producers sell at the equilibrium price

supply

the amount of a good or service that producers are willing and able to sell at a specific time

Expected Family Contribution

the amount of college costs for which a family is responsible; determined by a formula

quantity demanded

the amount one is willing to buy or capable of buying at any given time and price

Q2) The concept of a double coincidence of wants is the instrumental part of _______.

the barter system

Q3) Fluctuations through a series of economic expansions and contractions is part of ______.

the business cycle

Federal Reserve System

the central bank of the United States that dictates monetary policy and is made up of the Board of Governors, the Federal Open Market Committee, and the Federal Reserve districts and banks; informally known as " the Fed"

marginal product

the change in a company's total output that occurs as a result of a one-unit increase in the workers hired (labor)

marginal cost

the change in total costs at each unit of product increase

marginal utility

the change in utility as the buyer consumes one more additional good or service

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.

dollar-gold convertibility

the circulation of dollars that are supported by gold reserves

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.

total cost

the cost of the factors of production used by the company

competition

the existence of rivals who are involved in the same product or service as another company

utility

the extent to which consumers derive benefit or happiness from their purchase

tuition

the fee charged for academic instruction

Consumer rights

the four major rights of a consumer include the rights to choose, to be safe, to be informed, and to be heard

8) Who authorizes fiat money?

the government

expansion

the growth of a country's economy and GDP

Board of Governors

the head of the Board of Governors of the Federal Reserve System; the spokesperson for the government on matters of monetary policy

Chair

the head of the Board of Governors of the Federal Reserve System; the spokesperson for the government on matters of monetary policy

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

income effect

the impact that a change in income has on the decisions a consumer makes

substitution effect

the impact that a change of price of one good would have on the demand and willingness to buy another similar good

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

Central bank

the main regulatory institution in a country that manages the supply of money in an economy

fiscal policy

the manner by which the U.S. government uses the federal budget to direct the national economy

capital

the manufactured goods and equipment used to make a new business product

normal profit

the opportunity cost experienced by a company by not doing something else

over-speculation

the overvaluing of property or something else

required reserve ratio

the percentage of deposits banks must hold on to at the request of the Federal Reserve System

marketplace

the place where buyers and sellers go to conduct business (can be a physical or virtual place)

Federal Open Market Committee

the policymaking arm of the Federal Reserve System that includes members of the Board of Governors and some of the presidents of the various Federal Reserve banks

usury

the practice of lending money at extreme interest

eminent domain

the practice of the government taking private property for the public good or for public use

4) In general, what happens to equilibrium price if demand increases?

the price moves higher

6) In general, what happens to equilibrium price if demand increases and supply decreases?

the price moves higher

Q2) In general, which of these happens to equilibrium price if supply increases?

the price moves lower.

scarcity

the problem that arises with limited resources and unlimited wants

potential GDP

the real GDP at full employment

monetary policy

the regulation of the amount of money in circulation

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

legal monopoly

the restriction of competition because of government action or law

private property

the right of Americans (or anyone) to own property and sell it for profit

outlet substitution effect

the tendency to buy normal goods at reduced prices through places like outlet centers or online shopping, skewing the CPI calculation because it only measures the regular price of goods

aggregate demand

the total amount of goods and services demanded at a certain price level within a particular period of time

M1

the total amount of money held by individuals and companies, as well as all travelers' checks and checkable deposits owned by individuals and companies

total utility

the total benefit that a consumer receives from the consumption of a good or service

accounting cost

the total of all expenditures a business needs to make; also includes the depreciation of any capital (equipment used to make the new business product)

aggregate supplyy

the total supply of all goods and services within an economy at a certain price level within a particular period of time

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

real GDP

the total value of all final goods and services expressed in the prices of a base year

Gross domestic product (GDP)

the total value of final goods and services produced within a particular country within a particular year

Gross national product (GNP)

the total value of final goods and services produced within a particular year by citizens of a particular country

diminishing marginal utility

the trend of marginal utility to decrease as consumption increases

Federal Reserve districts

the twelve districts of the Fed, each with a corresponding bank that is responsible for carrying out the Fed's policies

equity

the value of a home minus the amount still owed on the loan; represents the worth of a home in real terms to the homeowner

Demand Curve

the visual representation of the demand schedule; shows the progression of quantity demanded of a good or service and the price of that good or service

supply curve

the visual representation of the supply; shows the progression of quantity supplied of a good or service and the price of that good or service

4) When the Spanish and Portuguese discovered gold and silver in the Americas in the 1500s, _____.

the world's supply of gold and silver devalued because there was so much of it

purchasing power

the worth of a currency in relation to what it can buy

Q3) Economically, the government divides its earning marks into quarters, or every ______.

three months

6) Quantity demanded is measured in units of ______.

time

Q1) Quantity demanded or supplied is measured in units of ______.

time

Q2) A(n) ________ deposit pays higher interest but restricts when funds may be withdrawn.

time

2) A(n) ______ is a savings instrument that pays higher interest but restricts when funds may be withdrawn.

time deposit

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

Q1) Which of these is the purpose of the circular flow model?

to show the flow of money throughout the economy

8) The _________ product is the total amount of a product produced in a given period of time

total

12) The cost of the factors of production needed to run a business, including total fixed costs and total variable costs, is ______.

total cost

1) ________ an agreement between a buyer and seller to exchange goods or services ________ a personal record that gives bank customers a way of keeping track of their checking balance ________ report in which the bank informs its customers what account activity the bank has on record ________ the total amount an employee is paid before any deductions ________ comparing two sets of records to ensure accuracy

transaction check register bank statement gross wages reconciliation

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.

true false true false false true false true false true

1) _________ a short-term payment plan with a college that avoids interest and high fees _________ direct aid from the government, a school, or individuals based on eligibility _________ programs such as the Montgomery G.I. Bill that cover many college expenses _________ reduces one's tax burden dollar for dollar _________ working part time while attending school to pay tuition _________ a sum of money awarded to a student based on merit or need to pay educational expenses _________ working an off-campus job related to one's field of study _________ borrowing money that does not have to be repaid until after one leaves school

tuition payment plan grants military aid education tax credits work-study scholarships co-op programs

1) _________ the extent to which consumers derive benefit or happiness from their purchase _________ the trend of marginal utility to decrease as consumption increases _________ the impact that a change of price of one good would have on the demand and willingness to buy another similar good _________ the impact that a change in income has on the decisions a consumer makes _________ the change in utility as the buyer consumes one more additional good or service _________ the total benefit that a consumer receives from the consumption of a good or service

utility diminishing marginal utility substitution effect income effect marginal utility total utility

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9) Capital, when combined with labor, creates ___.

wealth

natural monopoly

when one company dominates by providing service that is better and/or lower-cost than that of other companies because of technology or other conditions

change in quantity demanded

when price is the cause of a change in demand and all other things remain the same

decreasing marginal returns

when the marginal product of adding a worker is less than the marginal product of the last worker hired

increasing marginal returns

when the marginal product of adding a worker is worth more than the marginal product of the last worker hired

negative marginal returns

when the marginal product of adding a worker results in a loss of marginal product