Chapter 1 Deck

Question 1

Because the government limits them by law, there are few ( ) in the United States.

Answer 1

monopolies

Question 2

Reported monthly by the Bureau of Labor Statistics, the ( ) is the most widely publicized measure of inflation.

Answer 2

consumer price index

Question 3

Under a system characterized by a ( ) competition, there are many customers buying a standardized product from numerous small businesses.

Answer 3

perfect

Question 4

( ) not only provide factors of production (or resources) but also consume goods and services.

Answer 4

households

Question 5

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 ( ).

Answer 5

equilibrium price

Question 6

( ) involves planning, organizing, directing, and controlling a company’s resources so it can achieve its goals.

Answer 6

management

Question 7

A ( ) is any activity that provides goods or services to consumers for the purpose of making a profit.

Answer 7

business

Question 8

( ) refers to the quantity of a product that sellers are willing to sell at various prices.

Answer 8

supply

Question 9

One way that economists measure the performance of an economy is by looking at a widely used measure of total output known as the ( ).

Answer 9

gross domestic product

Question 10

In calculating gross domestic product (GDP), the U.S. government does not include the following.

Answer 10

goods and services produced by U.S. companies in facilities outside of the United States.

Question 11

Among free-market theorists, the principle of laissez-faire means ( ).

Answer 11

leaving things alone

Question 12

Generally speaking, economic systems can be divided into ( ) and ( ) systems.

Answer 12

planned / free-market

Question 13

A ( ) accountant prepares information, such as reports on the cost of materials used in the production process, for internal use only.

Answer 13

managerial

Question 14

( ) involves the design and management of the processes that transform resources into goods or services.

Answer 14

operations

Question 15

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 ( ).

Answer 15

recession

Question 16

If, in any given year, the government takes in more money than it spends on goods and services, the result is a budget ( ).

Answer 16

surplus

Question 17

These ( ) are established to provide social and educational services.

Answer 17

nonprofit organizations

Question 18

A ( ) is a business that, beyond the profit motive, has a social mission built into its business model.

Answer 18

for-profit social enterprise

Question 19

( ) consists of everything a company does to identify customers’ needs and design products to meet those needs.

Answer 19

marketing

Question 20

( ) measure, summarize, and communicate financial and managerial information and advise other managers on financial matters.

Answer 20

accountants

Question 21

( ) accountants prepare financial statements to help users, both inside and outside the organization, assess the financial strength of a company.

Answer 21

financial

Question 22

( ) involves planning for, obtaining, and managing a company’s funds.

Answer 22

finance

Question 23

Resources (such as equipment, people, land) used to produce things are also called ( ).

Answer 23

factors of production

Question 24

What are the three questions that economists try to answer?

Answer 24

1. What goods and services should be produced to meet consumers’ needs?
2. How should goods and services be produced?
3. Who should receive the goods and services produced?

Question 25

( ) is the means by which a society (households, businesses, and government) makes decisions about allocating resources to produce products and about distributing those products.

Answer 25

economic system

Question 26

The system with the highest government control is ( ).

Answer 26

communism

Question 27

( ) may be government-owned.

Answer 27

socialism

Question 28

The economic system in which most businesses are owned and operated by individuals is the ( ), also known as ( ).

Answer 28

free-market system/capitalism

Question 29

In ( ) competition there are still many sellers, but the products they sell are differentiated.

Answer 29

monopolistic

Question 30

( ) means few sellers. Each seller supplies a large portion of all the products sold in the marketplace.

Answer 30

oligopoly

Question 31

The economic ups and downs resulting from expansion and contraction constitute the ( ).

Answer 31

business cycle

Question 32

A business cycle can be divided into four general phases of ( ), ( ), ( ), and ( ).

Answer 32

prosperity / recession / depression / recovery

Question 33

Through ( ), the government exerts its power to regulate the money supply and level of interest rates.

Answer 33

monetary policy

Question 34

Through ( ), the government uses its power to tax and spend.

Answer 34

fiscal policy

Question 35

The Fed uses ( ) policy to decrease the money supply and raises interest rates when inflation is a problem.

Answer 35

contractionary

Question 36

The Fed uses ( ) policy to increase the money supply and reduce interest rates when a recession is a problem.

Answer 36

expansionary

Question 37

( ) examines the economy-wide effect of inflation.

Answer 37

macroeconomics

Question 38

( ) explains the price that we are willing to pay for something.

Answer 38

microeconomics

Question 39

To convert a business previously owned by the government to private ownership is a process called ( ).

Answer 39

privatization

Question 40

The economy would be in a ( ) if a recession lasts a long time.

Answer 40

depression

Question 41

An ( ) is a statistic that provides valuable information about the economy.

Answer 41

economic indicator