Chapter 3 Flashcards
A basic principle of free enterprise is the importance of _____ _____
Profit motive
The American tradition of free enterprise is a _____ _____ of our economic success
Key factor
_____ _____ is the concept that everyone can compete in the market place
Open opportunity
_____ _____ provides everyone equal opportunity
Legal equality
_____ _____ allows people to decide the terms of the contracts they make
Free contract
The market also operates on the right of _____ _____
Voluntary exchange
_____ _____ _____ require companies to inform consumers about their products
Public disclosure laws
The government stepped in during the 1960s in matters of _____ _____
Public interest
_____ is the study of the behavior and decision making of entire economies
Macroeconomics
_____ studies the economic behavior and decision making of small units
Microeconomics
The total value of all final goods and services produced in an economy is a nation’s _____ _____ _____
gross domestic product (GDP)
Policymakers pursue 3 main outcomes:
●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.
_____ _____: a commitment to the value of work and purposeful activity
Work ethic
_____ is another way to improve the standard of living
Technology
A _____ ______ is a shared good or service for which it would be inefficient or impractical to make consumers pay individually and to exclude nonpayers
Public good
_____ _____ are people who choose not to pay for a benefit, but benefit from it anyways
Free riders
_____ _____ is a situation in which the market does not distribute resources efficiently on its own
Market failure
The _____ _____ is an income level below that which is needed to support families or households
Poverty threshold
_____ is a general term that refers to government aid for the poor
Welfare
_____ _____ are direct payments of money to the poor, disabled, and retired people
Cash transfers
TANF
●Temporary Assistance for Needy Families
●The program aims to move people from welfare dependence to the work force.
Social security
●Created in 1935 during the Great Depression.
●Provides cash transfers of retirement income to the elderly and living expenses to disabled Americans.
Unemployment insurance
Unemployment compensation checks provide money to eligible workers who have lost their jobs.
Workers compensation
●Provides a cash transfer to workers injured on the job.
__-_____ _____ are goods and services provided for free or at greatly reduced prices.
In-kind benefits
_____ and _____ are other benefits provided by the government
Medicaid and Medicare
_____ is another benefit given to the poor.
Education
