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Economics > Chapter 8 > Flashcards

Chapter 8 Flashcards

1
Q

the commitment of resources to a project or purpose that is expected to bring future profit to an investor

A

investment

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2
Q

one who borrows money or capital

A

debtor

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3
Q

one who lends money or capital

A

creditor

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4
Q

an account that allows checks to be written up to the dollar amount that the account holder has deposited

A

transaction account\checking account

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5
Q

an account holder’s written order that authorizes his bank to withdraw funds from his account

A

check

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6
Q

a bank account that allows the account holder to earn interest on his deposits

A

savings account

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7
Q

an account that guarantees a certain interest rate and has a specified maturity date

A

CD, certificate of deposit

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8
Q

an account that allows limited transactions and pays an interest rate that changes with the demand for loans

A

money market account

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9
Q

a contract between two parties in which one party protects the other against certain types of loss in exchange for payments called premiums

A

insurance

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10
Q

an arrangement provided by an individual’s employer for the intent of providing for the employee’s retirement from work

A

pension plan

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11
Q

the resources corporations gather by selling ownership in their businesses

A

stocks

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12
Q

a legal entity which is distinct from the people who own it

A

corporation

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13
Q

equal portions of a corporations stock

A

shares

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14
Q

if a corporation fails or declares bankruptcy, the individidual stockholders do not personally have to pay the firm’s creditors

A

limited liabilty

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15
Q

shares of a corporation’s profit

A

dividends

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16
Q

a document that guarantees the bondholder the amount of his original investment plus a specified rate of interest by a certain date

A

bond

17
Q

investment companies that combine the resources of all their shareholders and invest the money in a wide variety of areas

A

mutual funds

18
Q

assets that flow easily since they can be converted into other investments or cash without much time or difficulty

A

liquid investments

19
Q

What are the 5 factors of production?

A
  1. Natural Resources
  2. Labor
  3. Capital
  4. Entrepreneurship
  5. Information
20
Q

What is a system in which decisions involving the production, distribution, and consumption of goods are based upon custom, heredity, and caste?

A

Traditional Economy

21
Q

What is the centralized authority that determines the production and distribution of goods?

A

Command Economy

22
Q

What is the system in which people are free to make their own economic choices?

A

Free Enterprise Economy

23
Q

What is a system that combines a good measure of free enterprise in some areas with heavy state regulation in others?

A

Mixed Economy

24
Q

What is any work that contributes to the production of goods?

A

Labor

25
Q

The labor of free men and women is usually more ________ than the labor of slaves.

A

Productive

26
Q

What is an economic system that provides barely enough to keep a society alive?

A

Subsistence Economy

27
Q

Anyone who owns producer goods or owns a share of some business that produces goods is a __________

A

Capitalist

28
Q

Majority of a nation’s capital is owned and controlled by private individuals and business is known as _____ ______

A

Private Capitalism

29
Q

A system in which the owner of much of the nation’s capital is a powerful, centralized apparatus called the collectivist state is ______ ______

A

State Capitalism

30
Q

The intelligent direction and supervision of natural and human economic resources is known as ___________

A

Entrepreneurship

31
Q

A person who undertakes management of economic enterprises on a bold scale, with some danger of losing his investment of money and time is a __________

A

Entrepreneur

32
Q

Capitalism’s basic rights:

A
  1. property rights
  2. freedom of enterprise and competition in a market environment
  3. limited government
33
Q

What are the 3 types of property?

A
  1. tangible
  2. financial
  3. intellectual
34
Q

Private households and private businesses make the __________ of economic decisions in the free market.

A

Majority

35
Q

Free enterprise is only possible in the presence of _______ ________

A

Limited Government

36
Q

What model illustrates how resources and products move through the market?

A

Circular Flow Model

37
Q

The product market is where what is sold?

A

Consumer Products

38
Q

The resource market is where what is sold?

A

Factors of Production

Economics (7 decks)

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