Consumer Economics Flashcards
National debt
The amount of money the government owes other countries after borrowing from them
Unemployment
Someone looking for work but has no job
Inflation
Period of rising prices (related to personal money management).
GDP
Gross National Product
Value of goods and services produced in a country during the year
(only finished goods are counted)
Economics
The study of how a society uses its resources to produce and distribute goods and services, while satisfying wants and needs
Inflation: As prices go up, the value of money goes…?
Down
Inflation: If income does not rise at the same rate as prices, buying power is…?
Reduced
Traditional economy
Learned from traditions and beliefs of family or people
Usually poor, education lacking
Command economy
Decisions made by gov., and they control both recourses and production
Maker economy
Businesses made production decisions, citizens buying drives economy
Mixed economy
Some gov. Control, businesses privately/publicly owned
Businesses satisfy wants, gov satisfies needs
The US is what kind of economy?
Mixed
The federal reserve system controls the supply money in three different ways
Change in reserve requirements (how much can be held in banks?)
Change in discount rate
Open market operations
Who sets the nations fiscal policy?
The president and congress
Who sets the nations monetary policy?
The federal reserve
Fiscal policy
Fed gov’s taxing and spending decisions
Used during periods of recession and and high unemployment to stimulate the economy
Monetary policy
Actions the federal reserve board takes to manage the supply of money and credit in the economy???
CPI (consumer price index)
Charts the ups and downs in the prices of consumer goods and services, and therefore measure the average change in prices over time for selected time for selected goods and services
Scarcity
The challenge of stretching resources to cover needs and wants
Law of demand
The lower the price the higher the demand
Law of supply
The more supply, the higher the demand
Equilibrium point
When both the supply and demand are equal
Supply vs demand
Supply: Amount of a product or service producers are willing to provide
Demand: Quantity of a product or service consumers are willing to buy
When looking at a supply and demand graph, where are the surplus and shortage?
Above and below the X
