Chapter 1 Deck Flashcards
Because the government limits them by law, there are few ( ) in the United States.
monopolies
Reported monthly by the Bureau of Labor Statistics, the ( ) is the most widely publicized measure of inflation.
consumer price index
Under a system characterized by a ( ) competition, there are many customers buying a standardized product from numerous small businesses.
perfect
( ) not only provide factors of production (or resources) but also consume goods and services.
households
When we plot a supply curve and a demand curve for apples on one graph, the point at which the two points intersect is the ( ).
equilibrium price
( ) involves planning, organizing, directing, and controlling a company’s resources so it can achieve its goals.
management
A ( ) is any activity that provides goods or services to consumers for the purpose of making a profit.
business
( ) refers to the quantity of a product that sellers are willing to sell at various prices.
supply
One way that economists measure the performance of an economy is by looking at a widely used measure of total output known as the ( ).
gross domestic product
In calculating gross domestic product (GDP), the U.S. government does not include the following.
goods and services produced by U.S. companies in facilities outside of the United States.
Among free-market theorists, the principle of laissez-faire means ( ).
leaving things alone
Generally speaking, economic systems can be divided into ( ) and ( ) systems.
planned / free-market
A ( ) accountant prepares information, such as reports on the cost of materials used in the production process, for internal use only.
managerial
( ) involves the design and management of the processes that transform resources into goods or services.
operations
When the United States experiences a slowdown in economic activity and Gross Domestic Product (GDP) goes down for two consecutive quarters, it is called a ( ).
recession
If, in any given year, the government takes in more money than it spends on goods and services, the result is a budget ( ).
surplus
These ( ) are established to provide social and educational services.
nonprofit organizations
A ( ) is a business that, beyond the profit motive, has a social mission built into its business model.
for-profit social enterprise
( ) consists of everything a company does to identify customers’ needs and design products to meet those needs.
marketing
( ) measure, summarize, and communicate financial and managerial information and advise other managers on financial matters.
accountants
( ) accountants prepare financial statements to help users, both inside and outside the organization, assess the financial strength of a company.
financial
( ) involves planning for, obtaining, and managing a company’s funds.
finance
Resources (such as equipment, people, land) used to produce things are also called ( ).
factors of production
What are the three questions that economists try to answer?
- What goods and services should be produced to meet consumers’ needs?
- How should goods and services be produced?
- Who should receive the goods and services produced?
( ) is the means by which a society (households, businesses, and government) makes decisions about allocating resources to produce products and about distributing those products.
economic system
The system with the highest government control is ( ).
communism
( ) may be government-owned.
socialism
The economic system in which most businesses are owned and operated by individuals is the ( ), also known as ( ).
free-market system/capitalism
In ( ) competition there are still many sellers, but the products they sell are differentiated.
monopolistic
( ) means few sellers. Each seller supplies a large portion of all the products sold in the marketplace.
oligopoly
The economic ups and downs resulting from expansion and contraction constitute the ( ).
business cycle
A business cycle can be divided into four general phases of ( ), ( ), ( ), and ( ).
prosperity / recession / depression / recovery
Through ( ), the government exerts its power to regulate the money supply and level of interest rates.
monetary policy
Through ( ), the government uses its power to tax and spend.
fiscal policy
The Fed uses ( ) policy to decrease the money supply and raises interest rates when inflation is a problem.
contractionary
The Fed uses ( ) policy to increase the money supply and reduce interest rates when a recession is a problem.
expansionary
( ) examines the economy-wide effect of inflation.
macroeconomics
( ) explains the price that we are willing to pay for something.
microeconomics
To convert a business previously owned by the government to private ownership is a process called ( ).
privatization
The economy would be in a ( ) if a recession lasts a long time.
depression
An ( ) is a statistic that provides valuable information about the economy.
economic indicator
