1139 Definitions + accidental extras

Question 1

method by which economic problems are solved in a society

Answer 1

economic system

Question 2

system by which economic decisions are made in a government

Answer 2

command system

Question 3

system by which decisions are made by historical tradition

Answer 3

traditional system

Question 4

system in which decisions are made in response to supply and demand

Answer 4

market system

Question 5

systematic study of the production, distribution, and consumption of goods and services

Answer 5

economics

Question 6

Biblical term for contract

Answer 6

covenant

Question 7

quantity of goods or services available for sale

Answer 7

supply

Question 8

desire of potential buyers for goods and services

Answer 8

demand

Question 9

a single business that is the only source for a product or service

Answer 9

monopoly

Question 10

union of several corporations who unite to eliminate competition and regulate prices

Answer 10

trust

Question 11

type of socialism that involves government ownership of businesses and industries

Answer 11

ownership socialism

Question 12

type of socialism that involves government control of wages and prices

Answer 12

control socialism

Question 13

excess of total revenue over total cost

Answer 13

profit

Question 14

excess of total cost over total revenue

Answer 14

loss

Question 15

means by which value is determined

Answer 15

economic calculation

Question 16

developed from the writings of Karl Marx
attempts to end capitalism through revolution
has failed in most nations where it has been tried
advocates expropriation of private property without compensation

Answer 16

Communism

Question 17

advocates a gradual transfer of the means of production to public ownership
developed from the writings of Karl Marx
may allow political freedom and free elections
continues to exist in many nations

Answer 17

Socialism

Question 18

author of ‘The Wealth of Nations’

Answer 18

Adam Smith

Question 19

author of Das Kapital and Communist Manifesto

Answer 19

Karl Marx

Question 20

a small capitalist

Answer 20

petty bourgeois

Question 21

practice that leads to economic collapse

Answer 21

overexpanded credit

Question 22

a socialist

Answer 22

Karl Marx

Question 23

a capitalist

Answer 23

Adam Smith

Question 24

economic system with a highly controlled market and many government regulations

Answer 24

mercantilism

Question 25

strongest motivation in trade

Answer 25

self-interest

Question 26

real price for a good or service

Answer 26

labor

Question 27

nominal price of a good or service

Answer 27

money

Question 28

the cost of production

Answer 28

natural price

Question 29

material used in production

Answer 29

stock

Question 30

tools or equipment used in production

Answer 30

capital

Question 31

price at which the product is sold

Answer 31

market price

Question 32

desire for a product

Answer 32

demand

Question 33

demand without ability to pay

Answer 33

absolute demand

Question 34

demand of those willing and able to pay

Answer 34

effectual demand

Question 35

lack of all types of restraints on trade

Answer 35

laissez-faire

Question 36

prevents limiting of production to raise prices

Answer 36

competition

Question 37

According to Adam Smith, government's only functions are

Answer 37

justice, public works, defense

Question 38

Karl Marx's economic model

Answer 38

Capitalism will eventually collapse Capitalism has an inherent tendency to overproduce Capitalism has an inherent tendency to expand credit continuously. Capitalism inevitably produces business cycles. Eventually a major depression destroys capitalism. At that point, the proletariat takes over and a new communist society is established. The new, utopian society had no need for government or money Because government did not vanish in communist nations, leaders modified Marxism and claimed that a transition stage was necessary

Question 39

study of individual units of an economy

Answer 39

microeconomics

Question 40

study of the economy as a whole

Answer 40

macroeconomics

Question 41

a stable economy

Answer 41

equilibrium

Question 42

value of income in terms of purchasing power

Answer 42

real wage

Question 43

value of income in monetary terms

Answer 43

money wage

Question 44

market value of all final goods and services produced within a nation during one year

Answer 44

gross domestic product

Question 45

wearing down of buildings, tools, and machines

Answer 45

capital depreciation

Question 46

continuous increase in average prices of goods and services

Answer 46

inflation

Question 47

market value of all final goods and services produced by the citizens and businesses of a nation during one yeat

Answer 47

gross national product

Question 48

income to those who loan money

Answer 48

interest

Question 49

measure of the change in average prices of common goods and services

Answer 49

consumer price index

Question 50

payment for the risk factor inherent in any loan

Answer 50

pure profit

Question 51

payment without regard to variations in interest rates

Answer 51

pure interest

Question 52

payment for an expected decrease in the purchasing power of money

Answer 52

inflation premium

Question 53

payment to induce a lender to part with present purchasing power

Answer 53

originary interest

Question 54

Government _____________ that affect a nation's economy are an indirect method of attaining _______________ that politicians consider desirable

Answer 54

fiscal policies | macroeconomic goals

Question 55

These fiscal policies also affect ____________ of businesses and individuals

Answer 55

microeconomic decisions

Question 56

Macroeconomics focuses of the _________, the _______, and the ___________ and/or ___________

Answer 56

employment level production level economic growth stability of a national economy

Question 57

The Great Depression was a ___________ caused partly by ____________ and partly by the ____________.

Answer 57

worldwide event high import tariffs overpricing of labor

Question 58

The solution of governments to the Depression was to

Answer 58

inflate the currency

Question 59

When a currency is inflated, the ________________

Answer 59

real wage drops and the money wage remains the same

Question 60

The CPI is a measurement of _________, and the cost of the market basket is the gauge of the ___________

Answer 60

inflation | cost of living

Question 61

Jean Baptiste Say's law states that ______________________

Answer 61

economy tends toward equilibrium

Question 62

A ____________ exists among consumers, businesses, governments, and financial institutions

Answer 62

circular flow

Question 63

J.M. Keynes theory included the idea that _______

Answer 63

a depression occurs because of overproduction a depression is an example of capitalism's failure to operate government spending and inflation stimulate consumption and investment government should institute deficit spending on public works credit spending is a virtue

Question 64

Gross domestic product is

Answer 64

the sum of an economy's outputs expressed in units of value a report of total production for a period of one year a measurement of final output

Question 65

The gross domestic product is limited because

Answer 65

it deals with money values as opposed to real values it does not measure unpaid production it may reflect an increase in government spending it does not measure quality

Question 66

The rate of inflation may be measured as

Answer 66

an annual rate of increase in the average price level | a decrease in the value of money

Question 67

Methods suggested for reducing inflation

Answer 67

increasing the output of goods and services eliminating excessive money growth simply accepting, constant, gradual inflation

Question 68

Interest rates vary because

Answer 68

``` loans are for varying lengths of time lenders may search for the best rate the supply of funds and the demand for loans vary there are differing amounts of risks the cost of administering loans varies ```