Chapter 5 Test Flashcards
How is unemployment a problem for society?
It is a waste of human labor and is usually accompanied by poverty, crime, and despair
What is the difference between extensive growth and intensive
growth of an economy?
Extensive growth- the economy produces more goods and services by increasing its amount of land, labor, or capital
Intensive growth- the economy does not increase the amount of the factors of production but rather increases efficiency
What are the three critical questions that every society must an swer as it seeks to meet its economic goals?
What will be produced, how it will be produced, and who will receive what is produced
How is the consumer goods/capital goods tradeoff a matter of spending versus saving?
When people spend money for consumer goods rather than save it, financial institutions do not have money available to loan to businesses and the inverse is true
What is the difference between a labor intensive business and a capital intensive business?
Labor intensive business- uses a higher number of workers to produce its products
Capital intensive business- places a greater emphasis on machinery and equipment to produce its products
What should be the standard that Christians use to answer the distribution question?
Scripture
List the four economic goals of most societies and in your own words explain the economic importance of each.
Low level of unemployment, stable level of prices, healthy rate of economic growth, and fair distribution of income
Identify the three biblical principles that provide a basis for a Christian’s treatment of the poor.
Christians are to love their neighbors as themselves, do good to all men, and their works are to glorify their father in heaven
What way does the Bible give for a person to generate his own personal income? Use Scripture to support this position.
To work- Proverbs 10:4, 12:27, 22:29
What is a society’s economic problem?
How best to accomplish its economic goals
