Chapter one

Question 1

business

Answer 1

The organized effort of individuals to produce and sell, for a profit, the goods and services that satisfy society’s needs

Question 2

business cycle

Answer 2

The recurrence of periods of growth and recession in a nation’s economic activity

Question 3

capitalism

Answer 3

An economic system in which individuals own and operate the majority of businesses that provide goods and services

Question 4

command economy

Answer 4

An economic system in which the government decides what goods and services will be produced, how they will be produced, for whom available goods and services will be produced, and who owns and controls the major factors of production

Question 5

consumer price index

Answer 5

a monthly index that measures the change in prices of a fixed basket of goods purchased by a typical consumer in an urban area

Question 6

depression

Answer 6

a severe recession that lasts longer than a typical recession and has a larger decline in business activity compared to a recession

Question 7

e-business

Answer 7

the organized effort of individuals to produce and sell for a profit, the goods and services that satisfy society’s needs through the facilities available online

Question 8

economy

Answer 8

the way in which people deal with the creation and distribution of wealth

Question 9

entrepenuer

Answer 9

a person who risks time, effort, and money for to start and operate a business

Question 10

factors of production

Answer 10

inputs and resources used to produce goods and services

Question 11

fiscal policies

Answer 11

government influence on the amount of saving and expenditures; accomplished by altering the tax sturcture and by changing the levels of government spending

Question 12

gross domestic product (gdp)

Answer 12

the total dollar value of all goods and services produced by all people within the boundaries of a country during a specified time period

Question 13

invisible hand

Answer 13

describes how an individuals own personal gain benefits others and a nation’s economy

Question 14

who created the term invisible hand

Answer 14

Adam smith

Question 15

mixed economy

Answer 15

an economy that exhibits elements of both capitalism and socialism

Question 16

monetary policies

Answer 16

federal reserve’s actions to promote maxium employment, stabilize prices, and increase or decrease interest rates

Question 17

producer price index

Answer 17

a monthly index that measures prices that producers receive for their finished goods

Question 18

productivity

Answer 18

the average level of output per worker per hour

Question 19

profit

Answer 19

What remains after all business expenses have been deducted from sales revenue

Question 20

recession

Answer 20

two or more consecutive three month periods of decline in a country’s GDP

Question 21

stakeholders

Answer 21

all the differret people or groups of people who are affected by an organization’s policies, decisions, and activites

Question 22

standard of living

Answer 22

A loose, subjective measure of how well off an individual or a society is, mainly in terms of want satisfaction through goods and services

Question 23

unemployment rate

Answer 23

the percentage of a nation’s labor force unemployed at anytime

Question 24

deflation

Answer 24

a general decrease in the level of prices

Question 25

federal deficit

Answer 25

a shortfall created when the federal government spends more in a fiscal year than it receives

Question 26

inflation

Answer 26

a general rise in the level of prices

Question 27

macroeconomics

Answer 27

study of the national economy and the global economy

Question 28

market economy

Answer 28

an economic system in which businesses and individuals decide what to produce and buy, and the market determines prices and quantities sold

Question 29

microeconomics

Answer 29

the study of decisions made by individualsand businesses

Question 30

national debt

Answer 30

the total of all federal deficits

Question 31

socialism and communism

Answer 31

are both command economic systems