Unit 1 Economics Review

In a traditional economic system, which scenario would one most likely see?

A farmer grows a one-acre farm to produce all the vegetables his family will need over the course of a growing season

Inflation

A loss of value of money that causes a rise in prices

Which scenario best explains scarcity?

A man has $20 but wants to take his girlfriend to a fancy steak restaurant, where he needs $70.

Credit refers to ___

A consumer's record of going into and getting out of debt in a faithful and punctual way

Deflation

A decrease in the general price level of goods and services

Which scenario does NOT express a decision made with an economic perspective?

A young man makes an impulse buy and purchases two CDs he heard about from a friend

Which philosopher is most associated with the market economy?

Adam Smith

The future of the U.S. Social Security system is in jeopardy because of a large number of ___ and a declining birth rate

Baby Boomers

Fluctuations of expansion and recession are part of the ___

Business Cycle

Karl Marx and Friedrich Engels believed that ________ was(were) wrong and that workers should control the economy

Capitalism

_____holds a large portion of U.S. debt

China

Which answer was NOT a weakness of the Articles of Confederation?

Congress could not negotiate treaties with foreign countries

Hamilton's economic plan included all of the following parts EXCEPT ___

Creation of a new set of bank notes

It is required that you have good _______ in order to purchase a home

Credit History

One of the first three departments of the early American government was the ___

Department of State

Which answer is NOT characteristic of a command economic system?

Encouragement of the pursuit of wealth

The ______ movement influenced Adam Smith's foundational ideas of the market economic system

Englightenment

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

Expansion

_______ is a period when the economy and GDP begin to improve and grow. It is characterized by lower unemployment, an increase in consumption and investment, and banks willing to loan money

Expansion

Which government agency ensures that businesses operate legally so that the consumer will not be misled or harmed?

Federal Trade Commission

What is the purpose of interest?

For the lender to make money in exchange for giving money to those who need it

Economic Perspective

Making rational decisions by comparing the benefits and costs or purchasing a good or service

With support from the Labour Party, R.H. Tawney pushed Great Britain toward a _________

Mixed market Economic System

The thing you miss out on when you decide to spend your money on something else is considered the ___.

Opportunity Cost

The ________ is reached when a country's economy (GDP) is at its highest output

Peak

When a shopper makes a rational choice, they may ____

Pick the item that represents the greatest value

A country's GDP economic peak is followed by ____.

Recession

A slowdown in the economy characterized by rising unemployment, a lack of consumption and investment, and banks being slow to lend money is called _______

Recession

Which country or region best exemplifies a traditional economy?

Rural Africa

The collapse of ____ greatly altered U.S. military spending

Soviet Union (Russia)

_________was the first constitution of the United States that gave more power to the states and left the federal government weak

The Articles of Confederation

The concept of a "double coincidence of wants" is the instrumental part of ___

The Barter System (traditional economics)

All of the following are economic powers of the U.S. government under the U.S. Constitution EXCEPT ___

The Senate passes all bills dealing with revenue

What is NOT a characteristic or a market economic system?

The pursuit of self-interest is frowned upon

During the 1873 depression, the people in debt were in favor of ___

The reissue of greenback dollars from the Civil War

Why were some of the states upset at the federal government paying off their debts when Hamilton was Secretary of the Treasury?

The states did not want to be answerable to the federal government or be put in a weaker position

GDP

The statistic that shows the total value of all goods produced within a country regardless of national affiliation.

In 1837, President Andrew Jackson contributed to a depression that followed after Martin Van Buren took office because of his fight ___.

To close the Bank of the United States

The biggest responsibility that consumers have is ___

To educate themselves on the products they are interested in, including their benefits and potential costs or problems

In a(n) __________ economy, transactions are typically done through barter rather than currency

Traditional

Double Coincidence of Wants

Two parties or people each hold an item the other wants, so they exchange the items.

A country's economy and GDP must be in decline for this long in order for its economic condition to be considered a recession

6 months

Which of the answers took up the largest percentage of U.S. spending in the 2020 budget?

Healthcare