Econ S.1
What is the function of a municipal bond?
Debt obligations which use the money to build schools, highways, hospitals, etc.
What are two examples of goods and two examples of services?
Goods are pens, hats, shoes, etc. Services are housekeeper, nurses, and teachers.
Use your own words to describe the trade off known as "guns or butter".
Guns or butter is the economic choice of choosing to produce domestic products or products for the military.
Explain how changes in income may affect the demand for goods.
If the people's income decreases then the demand for goods will become Lower. And vice versa.
Equilibrium means "balance" what is out of balance when a market is in a state of disequilibrium?
Supply, demand, or prices could increase or decrease drastically causing things to not be balanced.
What is an example of the kinds of choices that a business would have to make because of scarcity?
A business will have to decide how much of an item to produce depending on demand
What are two factors that can push a market into disequilibrium?
A shift in the demand or supply curve.
What are the chief characteristics of a general partnership?
An incorporated association of two or more individuals to carry on a business for profit.
Why does every decision involve a trade-off?
Because you must give up one thing to get something else.
Why do consumers hold such a power in a free market system? Give a specific example to support your answer.
Businesses sell products at the highest price that consumers are willing to pay.
How does the CPI affect the rate of inflation?
CPI represents prices paid by consumers.
How does the tradition of free enterprise impact the availability of consumer products?
It makes them more avalible as with free enterprise means more buisnesses and more competition and thusly more products avalible with more options to choose from
What is the difference between nominal GDP and real GDP?
Real is the nominal adjusted for inflation.
I'm your own words describe what a free market economy is.
Prices for good are determined by consumers and by the open market without intervention of the government.
What kind of person makes a good entrepreneur? List at least two personality traits of a successful entrepreneur.
Someone with a strong work ethic and the ability to make decisions and act.
According to substitution effect, what are consumers likely to do if the price of the leading brand of orange juice increases?
They will decide to either buy a different drink like apple juice or a different brand.
What is the relationship between the fed and the treasury?
They work together to borrow money when the gov't needs to raise cash.
Give an example of physical capital.
Things like buildings, equipment, or computers.
