Chapter 3

Question 0

A basic principle of free enterprise is the importance of _____ _____

Answer 0

Profit motive

Question 1

The American tradition of free enterprise is a _____ _____ of our economic success

Answer 1

Key factor

Question 2

_____ _____ is the concept that everyone can compete in the market place

Answer 2

Open opportunity

Question 3

_____ _____ provides everyone equal opportunity

Answer 3

Legal equality

Question 4

_____ _____ allows people to decide the terms of the contracts they make

Answer 4

Free contract

Question 5

The market also operates on the right of _____ _____

Answer 5

Voluntary exchange

Question 6

_____ _____ _____ require companies to inform consumers about their products

Answer 6

Public disclosure laws

Question 7

The government stepped in during the 1960s in matters of _____ _____

Answer 7

Public interest

Question 8

_____ is the study of the behavior and decision making of entire economies

Answer 8

Macroeconomics

Question 9

_____ studies the economic behavior and decision making of small units

Answer 9

Microeconomics

Question 10

The total value of all final goods and services produced in an economy is a nation’s _____ _____ _____

Answer 10

gross domestic product (GDP)

Question 11

Policymakers pursue 3 main outcomes:

Answer 11

●High employment: the government wants to provide jobs for Americans who can work.
●Steady growth: the goal is for each generation to have a higher standard of living than the previous one.
●Stable prices: stability gives consumers, producers, and investors confidence in the economy.

Question 12

_____ _____: a commitment to the value of work and purposeful activity

Answer 12

Work ethic

Question 13

_____ is another way to improve the standard of living

Answer 13

Technology

Question 14

A _____ ______ is a shared good or service for which it would be inefficient or impractical to make consumers pay individually and to exclude nonpayers

Answer 14

Public good

Question 15

_____ _____ are people who choose not to pay for a benefit, but benefit from it anyways

Answer 15

Free riders

Question 16

_____ _____ is a situation in which the market does not distribute resources efficiently on its own

Answer 16

Market failure

Question 17

The _____ _____ is an income level below that which is needed to support families or households

Answer 17

Poverty threshold

Question 18

_____ is a general term that refers to government aid for the poor

Answer 18

Welfare

Question 19

_____ _____ are direct payments of money to the poor, disabled, and retired people

Answer 19

Cash transfers

Question 20

TANF

Answer 20

●Temporary Assistance for Needy Families

●The program aims to move people from welfare dependence to the work force.

Question 21

Social security

Answer 21

●Created in 1935 during the Great Depression.

●Provides cash transfers of retirement income to the elderly and living expenses to disabled Americans.

Question 22

Unemployment insurance

Answer 22

Unemployment compensation checks provide money to eligible workers who have lost their jobs.

Question 23

Workers compensation

Answer 23

●Provides a cash transfer to workers injured on the job.

Question 24

__-_____ _____ are goods and services provided for free or at greatly reduced prices.

Answer 24

In-kind benefits

Question 25

_____ and _____ are other benefits provided by the government

Answer 25

Medicaid and Medicare

Question 26

_____ is another benefit given to the poor.

Answer 26

Education