Economics Flashcards
1
Q
This economist wrote An Inquiry into
the Nature and Causes of the Wealth of
Nations.
A
Adam Smith
2
Q
This economist pioneered the idea that
self-interest individuals make up the
economy.
A
Adam Smith
3
Q
This field of study analyzes the choices
that consumers make.
A
economics
4
Q
Economists estimate that the average
supermarket carries around this
number of items.
A
33,000
5
Q
One of the key principles of economics
is that individuals primarily act in this
manner.
A
self-interested
6
Q
This field of study allows us to
understand how the economy functions
smoothly or why it breaks down.
A
economics
7
Q
Economics is primarily about the way in
which individuals make choices about
allocating these services or assets.
A
(scarce) resources
8
Q
In economics, individuals make choices
to satisfy this unlimited quantity.
A
human wants
9
Q
Economists make these five basic
assumptions.
A
scarcity, trade-offs,
opportunity cost, rationality,
and gains from trade
10
Q
This economic assumption refers to the
limited amount of time, work, energy,
knowledge, and capital in society.
A
scarcity
11
Q
Economic choices about how much to
spend on healthcare, national defense,
and education fall under this economic
assumption.
A
scarcity
12
Q
This economic assumption refers to the
fact that every choice we makes
requires us to give up something in
return for something else.
A
trade-offs
13
Q
Because of this economic assumption,
every choice requires a trade-off.
A
scarcity
14
Q
The time spent watching television
instead of studying exemplifies this
economic assumption.
A
trade-offs
15
Q
This term refers to what we give up in
order to get our preferred choice.
A
opportunity cost
16
Q
This economic assumption refers to the
best alternative we have when making
a decision.
A
opportunity cost
17
Q
This activity is the opportunity cost of
watching television when you have an
upcoming test.
A
studying
18
Q
This value is the most important
opportunity cost of attending college.
A
time
19
Q
When people compare the benefits of
each action and choose the one that
produces the greatest benefit, they are
engaging in this activity.
A
cost-benefit analysis
20
Q
This economic assumption refers to
selecting the action that produces the
greatest benefit.
A
rationality
21
Q
These two adverbs describe the way in
which most people perform cost-benefit
analysis.
A
intuitively and approximately
22
Q
This term refers to individuals
maximizing in areas where they are
better than others.
A
specialization
23
Q
This economic assumption refers to
trade based on specialization.
A
gains from trade
24
Q
This economic activity must be
voluntary for the benefits to outweigh
the costs for both parties.
A
trade
25
Economic analysis mainly relies on
these three skills.
observation, description, and
measurement
26
These economic tools allow
economists to compare interactions
between economic values.
models
27
Economic models have this degree of
simplicity.
high
28
Economists mainly use these two types
of representations in their models.
diagrams and formulas
29
This type of economics explains
economic phenomena and allows
economists to make predictions based
on situations.
positive
30
This type of economics focuses on
cause-and-effect relationships.
positive
31
Positive economics is meant to be free
of this human factor.
judgment
32
This type of economics can predict the
way in which a price decrease will
affect the consumption of gasoline.
positive
33
This type of economics focuses on
what should be the case as opposed to
what is the case.
normative
34
Normative economics relies on this
human quality.
judgement
35
Normative economics uses this form of
analysis to consider different possible
outcomes.
cost-benefit analysis
36
This type of economics would
recognize the ways that increasing the
minimum wage would affect different
economic groups.
positive
37
This type of economics would use a
value judgment to determine whether to
raise the minimum wage.
normative
38
This outcome arises if there is no way
to improve the well-being of one person
without reducing the well-being of
another.
Pareto efficiency
39
This economist argued that an outcome
is efficient if there is no way to improve
the well-being of one person without
reducing the well-being of another.
Vilfredo Pareto
40
Vilfredo Pareto was born in this
country.
Italy
41
If goods and services are not fully
distributed, then the outcome does not
meet this type of efficiency.
Pareto
42
Deciding which distribution is best to
meet Pareto efficiency is an example of
this type of economics.
normative
43
Economists consider this economic
principle to be the first step to maximize
overall well-being.
efficiency
44
This branch of economics focuses on
individual behavior.
microeconomics
45
Microeconomics concentrates on
individual behavior as well as the
behavior of these economic institutions.
markets
46
This branch of economics focuses on
the performance of the economy at a
national level.
macroeconomics
47
Macroeconomics concentrates on this
scale of the economy.
national
48
Both microeconomics and
macroeconomics share basic
assumptions about this consumer
aspect.
human behavior
49
The two main branches of economics
differ in these two aspects.
scales and modes of
analysis
50
Many economists separate these two
branches of economics because of
their different modes of analysis.
microeconomics and
macroeconomics
51
Economic coordination stems from the
interaction between these two
economic principles.
supply and demand
52
The action of buyers and sellers in a
market influence these two economic
values of a good.
price and quantity
53
This branch of economics deals with
the interaction of supply and demand.
microeconomics
54
Economists see this type of market
competition as the ideal model for
economic analysis.
perfect
55
The effects of taxation and other
government policies fall under this
branch of economics.
microeconomics
56
This term refers to all the buyers and
sellers of a particular good or service.
market
57
This Chicago market is highly
organized.
Chicago Mercantile
Exchange
58
This economic intermediary helps to
set a price at an exchange.
auctioneer
59
Local gas stations fulfill this economic
role in the market for gasoline.
suppliers
60
The vehicle owners in a community
fulfill this economic role in the market
for gasoline.
buyers
61
The market for gasoline has this
degree of competition.
high
62
No one buyer or seller can influence
this economic value in a perfectly
competitive market.
price
63
The actions of these two economic
groups determine market price and
quantity.
buyers and sellers
64
This type of market occurs when a
good or service is highly standardized
with many market participants, and all
participants are well informed about the
market price.
perfectly competitive
65
The goods and services in a perfectly
competitive market must have this
degree of standardization.
high
66
Economists often assume this level of
market competition to analyze trends.
perfect
67
This term refers to the amount of a
good that consumers are willing to
purchase.
quantity demanded
68
This economic value is the most
important determinant of the quantity
demanded of a good.
price
69
This economic law states that
consumers will demand less of a good
if the price of the good is higher.
law of demand
70
Because of the law of demand, this
relationship exists between a good’s
price and quantity demanded.
law of demand
71
The law of demand centers on these
two factors.
price and quantity demanded
72
The law of demand is a result of this
economic analysis used by rational
decision-makers.
cost-benefit analysis
73
The opportunity cost of consuming a
good increases as this economic factor
increases.
price
74
The law of demand relates this
economic factor to the quantity
demanded of a good.
price
75
The law of demand relates this
economic factor to the price of a good.
quantity demanded
76
This type of economic diagram records
consumer demand for a good.
demand schedule
77
The demand curve of a diagram slopes
in this direction.
downward
78
This term refers to the diagram of a
demand schedule.
demand curve
79
This economic factor of demand is
often plotted on the horizontal axis of a
diagram.
quantity demanded
80
This economic factor of demand is
often plotted on the vertical axis of a
diagram.
price
81
Economists can move in these two
directions along the demand curve to
change the quantity demanded of a
good.
up and down
82
Adding multiple demand curves in this
direction gives the market demand.
horizontally
83
This market curve depicts the
relationship between quantity
demanded and price.
demand
84
Creating new bicycle lanes in a city will
shift the demand curve for gasoline in
this direction.
leftward
85
As you move to the left along a
demand curve, this economic factor will
decrease.
quantity demanded
86
As you move to the right along a
demand curve, this economic factor will
decrease.
price
87
The demand curve of a good will shift
for these four main reasons.
income, tastes, expectations,
and number of buyers
88
This term refers to the money an
individual receives from employment.
income
89
For most goods, demand and income
have this type of relationship
positive
90
For normal goods, this economic factor
rises as income rises.
demand
91
This term refers to goods for which
income and quantity demanded have a
positive relationship.
normal goods
92
This term refers to goods for which
income and quantity demanded have a
negative relationship.
inferior goods
93
For inferior goods, this economic factor
decreases as income rises.
quantity demanded
94
Bus rides are an example of this type of
good.
inferior
95
Gasoline is an example of this type of
good.
normal
96
According to the law of demand, as the
price of airline tickets decreases, this
economic factor will increase.
quantity demanded
97
A good that can suitably replace
another is this type of good.
substitute
98
This term refers to goods for which the
decrease in the price of one good leads
to a decrease in the quantity demanded
of another.
substitutes
99
Airline travel and travel by car are
these types of goods.
substitute
100
This term refers to goods for which a
decrease in the price of one good leads
to an increase in quantity demanded of
another.
complements
101
Automobile insurance and car
ownership are these types of goods.
complements
102
Consumers hold these opinions and
interests.
tastes
103
Concerns about the environmental
impact of driving exemplify this aspect
of consumer behavior.
tastes
104
Consumers hold these beliefs about
how the market will change in the
future.
expectations
105
Cutting back on spending because you
fear losing employment exemplifies this
aspect of consumer behavior.
expectations
106
Economists calculate market demand
by adding the demands of this group.
individual consumers
107
This term refers to the amount of a
good that sellers are willing to produce.
quantity supplied
108
This relationship exists between price
and quantity supplied.
positive
109
This law relates price and quantity
supplied.
law of supply
110
According to the law of supply, as price
increases, this economic factor will
increase.
quantity supplied
111
The law of supply relates quantity
supplied to this economic factor.
price
112
The law of supply relates price to this
economic factor.
quantity supplied
113
This type of economic analysis
determines the law of supply.
cost-benefit analysis
114
According to the law of supply, as the
price of gasoline rises, this economic
factor will rise.
quantity supplied
115
According to the law of supply, at lower
prices of gasoline, suppliers will be less
willing to produce this economic factor.
quantity
116
This economic curve reflects the
relationship between price and quantity
supplied.
supply curve
117
The supply curve reflects this
relationship between price and quantity
supplied.
positive
118
This economic factor is on the
horizontal axis of the supply curve.
quantity supplied
119
This economic factor is on the vertical
axis of the supply curve.
price
120
To determine the market supply curve,
economists add individual supply
curves in this direction.
horizontally
121
The supply curve shifts for these four
main reasons.
input prices, technology,
expectations, and number of
sellers
122
This term refers to the goods and
services that sellers must purchase to
supply a product.
inputs
123
An increase in input costs decreases
this economic factor at every price for
suppliers.
quantity supplied
124
If input prices fall, the supply curve of a
good will shift in this direction.
right
125
If input prices rise, the supply curve of
a good will shift in this direction.
left
126
Changes in this branch of knowledge
can affect how efficiently businesses
operate and how advanced their
products are.
technology
127
Improvements in technology have this
effect on the quantity of goods
supplied.
increase
128
Suppliers will reduce this quantity if
they expect prices to increase in the
future.
quantity supplied
129
As the number of sellers that enter the
market increases, this quantity
increases.
quantity supplied
130
The intersection between the demand
curve and the supply curve of a market
occurs at this point.
equilibrium
131
This term refers to the most efficient
combination of both price and quantity
of a good.
equilibrium
132
A market’s equilibrium point is the
intersection between the supply curve
and this market curve.
demand
133
This term refers to the point at which
forces at work in a system are
balanced.
equilibrium
134
At this point in the market, no
participant has a reason to alter their
behavior.
equilibrium
135
The market demand curve and supply
curve have this number of
intersections.
one
136
Buyers and sellers of a good are
satisfied at this point on a market
diagram.
equilibrium
137
Market equilibrium consists of these
two economic factors.
price and quantity
138
This situation arises when suppliers
would like to sell a greater amount of a
good than consumers are willing to
purchase.
excess supply
139
In cases of excess supply, this market
participant wants a greater amount of
supply than the other.
suppliers
140
In cases of excess supply, this market
participant has an incentive to lower
their asking price.
suppliers
141
If suppliers would like to sell a lesser
amount of a good than consumers are
willing to purchase, this type of demand
arises.
excess demand
142
In cases of excess demand, this market
participant wants a greater amount of
demand than the other.
buyers
143
In cases of excess demand, this market
participant has an incentive to raise
their asking price.
buyers
144
This type of market tends to gravitate
toward the equilibrium price and
quantity.
competitive
145
This type of market allocates resources
efficiently.
competitive
146
This type of market ensures that goods
and services go to the buyers who
value them most highly.
competitive
147
A competitive market ensures that
supplies provide goods with the lowest
of this type of cost.
input
148
The competitive market equilibrium
maximizes the benefits between these
two parties.
buyers and sellers
149
The height of a market demand curve
represents this type of buyer’s
willingness to pay.
marginal
150
This adjective describes the marginal
buyer’s attitude towards buying a good
or service.
indifferent
151
This term refers to the surplus value
that consumers receive from a certain
market price and quantity.
consumer surplus
152
Adding up the total surplus of all buyers
gives this type of surplus.
consumer surplus
153
Subtracting the height of the market
price from the height of this market
curve gives consumer surplus.
demand
154
Total consumer surplus equals the area
below the demand curve and above
this economic factor.
market price
155
The height of a market supply curve
represents this type of seller’s
willingness to supply.
marginal
156
This term refers to the combined
surplus of all suppliers.
producer surplus
157
Producer surplus is the area above this
market curve and below the market
price.
supply
158
This type of surplus is the sum of
consumer surplus and producer
surplus.
total surplus
159
A social planner’s primary economic
goal is to maximize this economic
value.
total surplus
160
Maximizing total surplus ensures that
this economic efficiency is met.
Pareto
161
This term refers to the total benefits
that market participants receive from
their interactions.
total surplus
162
Market points left or right of the
equilibrium lack this economic
standard.
efficiency
163
Synthetic Bovine Growth Hormone is
an example of this type of advance.
technological
164
Dairy farmers used this synthetic
development to increase milk
production by 10 to 15 percent.
Bovine Growth Hormone
165
These market participants benefited the
most from the development of synthetic
Bovine Growth Hormone.
consumers
166
Public health campaigns against
cigarette smoking reduce this market
factor.
demand
167
Public efforts to reduce smoking shift
the demand curve in this direction.
left
168
This term expresses the way in which
changes in price affect the demand for
a good.
price elasticity
169
This term refers to changes in the
quantity demanded of a good in
response to changes in price.
price elasticity of demand
170
Dividing the percent change in this
economic factor by the percent change
in price gives the price elasticity of
demand.
quantity demanded
171
Price elasticity of demand will never be
this type of number.
negative
172
The greater this economic value, the
greater the change in the quantity
demanded.
elasticity
173
If a one percent change in price leads
to a greater than one percent change in
the quantity demanded, the demand
can be described with this term.
elastic
174
If a one percent change in price leads
to a less than one percent change in
the quantity demanded, the demand
can be described with this term.
inelastic
175
If a one percent change in price leads
to a one percent change in the quantity
demanded, the demand can be
described with this term.
unit elastic
176
These four main factors influence the
price elasticity of demand.
substitutes, necessities,
market definition, and time
horizon
177
Goods with close substitutes have this
degree of price elasticity of demand.
high
178
Cola drinks typically have this degree
of price elasticity of demand.
high
179
Necessities tend to have this degree of
price elasticity of demand.
low
180
Gasoline tends to have this degree of
price elasticity of demand.
low
181
The broader this factor, the fewer close
substitutes a good will have.
market definition
182
Over time, goods shift closer to this
degree of elasticity.
elastic
183
Given two demand curves that pass
through the same point, the flatter
curve will have this degree of elasticity
compared to the other.
higher
184
The slope of a linear demand curve
must have this mathematical property.
constant
185
As you move down and to the right
along a demand curve, this economic
value decreases.
elasticity
186
This type of elasticity appears as a
vertical line on a market diagram.
perfectly inelastic
187
This type of elasticity appears as a
horizontal line on a market diagram.
perfectly elastic
188
This term refers to the ease with which
suppliers can change their quantity
supplied.
price elasticity of supply
189
This term refers to the percent change
in quantity supplied divided by the
percent change in price.
price elasticity of supply
190
The price elasticity of supply relates
these two economic factors.
quantity supplied and price
191
These three main factors affect the
price elasticity of supply.
ease of entry and exit,
scarce resources, and time
horizon
192
This type of elasticity occurs when new
suppliers can enter or exit a market
easily.
elastic
193
This type of elasticity occurs when new
suppliers cannot enter or exit a market
easily.
inelastic
194
The supply of airline flights tends to
have this degree of elasticity.
high
195
If the inputs of a good are scarce, then
the good will have this type of elasticity.
inelastic
196
The supply of beachfront properties
has this degree of elasticity.
low
197
The elasticity of supply changes in this
manner as the time horizon increases.
increases
198
Given two supply curves that pass
through the same point, the flatter
curve will have this degree of elasticity
compared to the other.
higher
199
Van Gogh paintings have this type of
elasticity of supply.
perfectly inelastic
200
Multiplying these two factors at the
equilibrium point gives total revenue.
price and quantity
201
Total revenue is calculated at this
specific market point.
equilibrium
202
This type of elasticity will cause total
revenue to increase down a demand
curve.
elastic
203
This type of elasticity will cause total
revenue to decrease down a demand
curve.
inelastic
204
The demand for milk tends to have this
type of elasticity.
inelastic
205
Governments use these controls to set
minimum and maximum prices.
price controls
206
The United States government typically
established this type of pricing on major
food crops.
minimum
207
The United States minimum wage is an
example of this type of government
economic policy.
price controls
208
The federal government imposed a
price ceiling on this Middle Eastern
good in 1979.
oil
209
Government intervention in the form of
price controls creates this type of cost.
social
210
This type of government economic
policy establishes a maximum on the
price of a good.
price ceiling
211
Rent control reduces this type of
surplus.
total
212
In a competitive market, this economic
factor rations goods.
price
213
Over time, supply and demand of
apartments shifts to this type of
elasticity.
elastic
214
This type of market demand will occur
when landlords lower rent.
excess demand
215
Minimum pricing on crops reduces
these two types of surpluses.
consumer and producer
216
Governments use this form of
economic payment to raise revenue for
public spending.
taxes
217
This political entity has the right to
enforce taxes.
government
218
A tax on consumers shifts the market
demand curve in this direction.
downward
219
These two market participants share
the burden of a tax.
suppliers and buyers
220
Taxes on consumers usually lower this
type of surplus, preventing mutually
beneficial exchange.
total
221
A tax on suppliers shifts the market
supply curve in this direction.
upward
222
This economic gap arises between the
amount consumers pay and the
amount producers receive.
price wedge
223
Price wedges reduce this economic
factor, regardless of who pays the tax.
quantity
224
models A tax will cause this type of reduction in
social welfare.
deadweight loss
225
Deadweight loss takes this shape on
market diagrams.
triangle
226
The burden of a tax depends on these
two elasticities.
supply and demand
227
The less elastic this market curve, the
greater the burden of the tax the buyers
must pay.
demand
228
The less elastic the supply and demand
curves, the lower this tax value will be.
deadweight loss
229
This term refers to the benefits that
trade participants receive.
gains from trade
230
Economic specialization in certain
fields leads to this economic activity.
trade
231
This model helps economists measure
the trade-off that producers face when
deciding on how much of a certain
good to produce.
production possibility frontier
232
All points along this economic line are
efficient for production.
production possibility frontier
233
This situation occurs when one
producer’s PPF is above and to the
right of another’s at every point.
absolute advantage
234
This situation arises when one
producer can carry out an activity more
efficiently and at a lesser cost than
another.
comparative advantage
235
Trading partners need to differ in this
economic advantage in order to
improve their overall well-being through
trade.
comparative
236
This type of trade can expand the size
of the economy and increase the size
of different industries.
free
237
If a country’s cost of supply is less than
world price, then the country will
become this type of trade participant.
exporter
238
The difference between these two
economic factors is exported via world
trade.
domestic consumption and
quantity supplied
239
For countries that export goods, this
economic surplus decreases as price
rises.
consumer
240
For countries that export goods, this
economic surplus increases as price
rises.
producer
241
These market participants benefit most
when a country becomes an exporter of
a good.
producers
242
These market participants benefit least
when a country becomes an exporter of
a good.
consumers
243
This type of welfare increases when a
country becomes an exporter.
social
244
For countries that import goods, this
economic surplus increases as price
rises.
consumer
245
For countries that import goods, this
economic surplus decreases as price
rises.
producer
246
These market participants benefit most
when a country becomes an importer of
a good.
consumers
247
These market participants benefit least
when a country becomes an importer of
a good.
producers
248
This economic factor rises when trade
is allowed and domestic price falls to
the world price.
quantity consumed
249
Domestic producers lower this quantity
as a response to lower world prices.
quantity supplied
250
The difference between these two
economic factors is imported in world
trade.
quantity produced
domestically and quantity
consumed domestically
251
who supply goods and services in the
economy.
firm
252
According to this economic law, firms
will supply a greater quantity of a good
as the price rises.
law of supply
253
This goal is the main priority of a firm.
maximizing profits
254
A company’s profit is the difference
between these two economic values.
total revenue and total costs
255
To calculate total revenue, multiply the
total quantity of output by this economic
value.
price
256
This type of cost includes the
opportunity cost of the resources used
in production.
economic
257
This type of cost includes only actual
monetary expenditures.
accounting
258
This type of cost cannot be changed in
the short run.
fixed
259
This type of cost can be changed in the
short run.
variable
260
This type of cost is the increase in
costs from producing an additional unit
of output.
marginal
261
Dividing the increase in total costs by
this economic value gives marginal
cost.
increase in quantity
262
This phenomenon occurs when the
addition of more workers leads to less
and less additional output.
diminishing returns to scale
263
This term refers to the additional
revenue gained from producing an
additional unit of output.
marginal revenue
264
If diminishing returns to scale apply,
this type of economic cost will increase
as output increases.
marginal
265
A profit-maximizing firm’s supply curve
will have this type of slope.
upward
266
More producers added to a market will
shift the market supply curve in this
direction.
outward
267
Producers will continue to enter the
market as long as they are making this
type of economic profit.
positive
268
Producers will stop entering the market
when economic profits reach this value.
zero
269
In a competitive market, business
owners earn this amount of economic
profit.
zero
270
This economic concept is a way of
allocating productive resources
between different activities.
price
271
Markets for commercial airplanes,
automobiles, and cereals share this
type of market competition.
imperfect
272
This term refers to markets with one or
few suppliers.
imperfectly competitive
273
Firms in imperfectly competitive
markets want to maximize this
economic concept.
profit
274
Firms in imperfectly competitive
markets face demand curves with this
type of slope.
downward
275
Firms with downward-sloping demand
curves possess this economic trait.
market power
276
This term refers to the ability of firms to
choose market prices.
market power
277
This type of market features only one
supplier.
monopoly
278
This term refers to the obstacles
preventing new competitors from
entering a market.
barriers to entry
279
This economic phenomenon is the
primary reason for the creation of a
monopoly.
barriers to entry
280
The market for diamonds is an example
of this type of market.
monopoly
281
The DeBeers company owned this
percentage of the world’s diamonds.
80
282
This type of monopoly occurs when the
government provides rights to a single
supplier to supply a product.
government-created
283
Patents and copyright laws are
examples of this type of monopoly.
government-created
284
Under patent law, the inventor of a new
technology earns the exclusive right to
use the technology for this number of
years.
20
285
This type of monopoly occurs when a
single supplier can supply the market at
a lower cost compared to multiple other
firms.
natural
286
Railroads, pipelines, and cable
television are examples of this type of
monopoly.
natural
287
Natural monopolies primarily occur
when a firm has a high number of these
costs.
fixed
288
The profit-maximizing strategy for every
firm is to increase supply until marginal
cost is equal to this economic value.
marginal revenue
289
Increasing supply beyond the
intersection of marginal revenue and
marginal cost causes this economic
value to decline.
profit
290
Market equilibrium generally occurs at
a lower price and higher quantity for
this type of market.
monopoly
291
A transfer of this type of surplus occurs
in a monopoly.
consumer
292
This 1890 law required the government
to review large mergers and
acquisitions.
Sherman Anti-Trust Act
293
Anti-trust laws helped split up this
technology company in 1984.
AT&T
294
This technology company was forced to
separate its Internet browser from its
operating system.
Microsoft
295
Public utilities such as electric power
companies must have their rates
approved by this external party.
public oversight agencies
296
This type of government often controls
local water, sewer, and sanitation
services.
municipal
297
This form of ownership is commonly
used to solve the problem of a
monopoly.
public
298
This term refers to a situation in which
companies charge a customer based
on the value the customer places on its
service.
price discrimination
299
With price discrimination, a firm’s
marginal revenue curve will be identical
to this curve.
market demand
300
When companies offer different
packages of television channels, they
are employing this economic strategy.
price discrimination
301
Under price discrimination, the greater
value a customer places on a product,
the greater this economic value will be.
price
302
These two groups of movie-going
consumers generally have a lower
willingness to pay.
children and senior citizens
303
College need-based financial aid is an
example of this economic strategy.
price discrimination
304
Price discrimination especially benefits
firms in these types of market.
monopolies
305
Price discrimination moves the market
closer to this economically desirable
quality.
Social efficiency
306
This term refers to markets with only a
few sellers.
Oligopoly
307
Manufacturers of tennis balls, washing
machines, and cigarettes compete in
this type of market.
Oligopoly
308
Firms in oligopolies must consider the
choices that these firms make.
other suppliers
309
This term refers to the situation that
arises when suppliers in a market
decide to cooperate and act as a
monopolist.
Cartel
310
Cartels are illegal under this United
States law.
anti-trust
311
Marginal revenue will be greater than
this economic value if a cartel restricts
output.
marginal cost of production
312
This organization controls the prices of
oil worldwide and acts as a cartel.
Organization of Petroleum
Exporting Countries
313
OPEC raised oil prices to this dollar
amount per barrel in 1981.
$35
314
In April of 2020, OPEC drastically
reduced oil output due to this crisis.
COVID-19
315
OPEC’s 2020 reduction of oil supply
affected oil prices in this manner.
increasing prices
316
This form of imperfect competition is
the most common for a market.
monopolistic
317
Monopolistically competitive markets
merge aspects of these two types of
markets.
perfectly competitive and
monopoly
318
Book publishing is an example of this
type of market.
monopolistic
319
Firms in monopolistically competitive
markets face this type of demand
curve.
downward-sloping
320
Monopolistically competitive firms
produce at the point at which marginal
cost is equal to this economic value.
marginal revenue
321
New firms will continue to enter
monopolistically competitive firms as
long as firms earn this type of profit.
positive
322
Demand curves will shift in this
direction as more choices become
available to consumers.
left
323
Entry or exit in monopolistically
competitive markets will occur until this
economic value is reached.
equilibrium
324
Social inefficiency exists in
monopolistically competitive markets
because price exceeds this economic
value.
marginal cost
325
This economic phenomenon increases
the range of choices available to
consumers.
diversification
326
Producers in imperfectly competitive
markets can earn economic profits by
erecting these economic phenomena.
barriers to entry
327
Firms that develop new technologies
are using this economic strategy.
innovation
328
Firms can gain this type of economic
control through innovation.
market power
329
This term refers to individuals who take
the risk of creating new products or
services.
entrepreneurs
330
Entrepreneurs can obtain a legal
monopoly using this government
process.
patent
331
Innovation helps break down this type
of inefficiency.
market imperfections
332
This economist created the phrase
“creative destruction.”
Joseph Schumpeter
333
This term refers to the viewpoint that
the benefits of innovation outweigh the
inefficiencies of resource allocation.
creative destruction
334
This economic concept ensures that
goods and services go to the
consumers who value them the most
highly.
market price
335
This term refers to the situation that
arises when competitive markets do not
produce socially desirable outcomes.
market failures
336
This economic phenomenon arises
when the actions of one party affect
another, but neither party pays nor is
paid for the effects.
externality
337
This term refers to a beneficial
externality.
positive externality
338
This term refers to a harmful
externality.
negative externality
339
This type of good arises when private
property rights cannot be established
for that good.
public
340
When bees pollinate apple trees,
increasing their size and value, they
cause this type of externality.
positive
341
Pollution is a common example of this
type of externality.
negative
342
Generally, there will be too much of an
activity that generates this type of
externality.
negative
343
Increasing production will increase
marginal costs if a supply curve takes
this form.
upward sloping
344
Competitive market equilibrium occurs
at the intersection between these two
curves.
supply and demand
345
Market equilibrium does not factor in
this type of cost.
social
346
The social cost of a product equals the
cost of treating an externality plus this
economic value.
marginal cost
347
The optimal level of a negative
externality is never this number.
zero
348
Given a positive externality, total
revenue would increase if this
economic value increased.
outputI’m finding this card a
bit difficult to wrap my heard
around—can you try a
rewrite?
349
This method of solving externalities
combines externality-producing
activities into one company.
internalization
350
Netflix uses this method to prevent the
production of externalities.
internalization
351
This theorem states that negotiation in
the private market should be able to
solve externality-created inefficiencies.
Coase Theorem
352
This economist developed the Coase
Theorem.
Ronald Coase
353
Ronald Coase’s theorem serves as a
solution to this economic inefficiency.
externalities
354
For the Coase theorem to apply,
parties must engage in this kind of
interaction.
negotiation
355
Ronald Coase believed that regardless
of this condition, socially efficient
solutions can arise.
initial distribution of rights
356
These rights must be clearly defined in
order to guarantee an efficient solution,
according to the Coase Theorem.
property rights
357
When these types of rights are not
clearly defined, the Coase Theorem
does not apply.
property rights
358
This entity can step in to resolve
externalities when private negotiations
fail.
government
359
Governments frequently use these two
economic methods to correct
externalities.
taxes and subsidies
360
This United States city became the first
to approve traffic congestion pricing in
2019.
New York City
361
New York City approved congestion
pricing in April of this year.
2019
362
This type of vehicle must pay traffic
congestion fees already in some cities
of the United States.
for-hire
363
This method of solving externalities is
most effective when the value of an
externality can be estimated.
taxes
364
This economic strategy is established
when the value of an externality cannot
be easily estimated.
quota
365
Governments can create markets in
which drivers can buy or sell this
product to reduce the effects of
externalities.
permits
366
This United States organization uses
permits to reduce sulfur dioxide
emissions.
Environmental Protection
Agency
367
The EPA distributed rights to emit
sulfur dioxide through this type of
market.
auction
368
This United States state implemented
an emissions trading system in 2013.
California
369
The California emissions trading
system limits the emission of this type
of gas.
greenhouse
370
This government institution is essential
to the market economy and is not a
natural occurrence but rather a social
innovation.
property rights
371
This economic phenomenon arises
when no individual addresses the
negative externalities of a jointly owned
resource.
tragedy of the commons
372
A tragedy of the commons can occur
as overuse causes this type of
externality.
negative
373
Creating this political institution can
solve the tragedy of the commons.
property rights
374
This type of ownership can help
address the tragedy of the commons.
private
375
With this type of good, one individual’s
consumption reduces the amount of
that good available to others.
rival
376
Because one slice consumed is one
less slice available to other consumers,
pizza is this type of good.
rival
377
Because one consumer listening to the
radio does not diminish the ability of
other listeners, the radio is this type of
good.
non-rival
378
This quality of goods describes the
ability of a seller to control who
consumes the good.
excludability
379
In terms of excludability, national
defense can be described with this
term.
non-excludable
380
In terms of excludability, the
consumption of pizza can be described
with this term.
excludable
381
Private goods have these degrees of
rivalry and excludability.
high rivalry and high
excludability
382
Pizza falls under this category of
goods.
private
383
Common resources have these
degrees of rivalry and excludability.
high rivalry and low
excludability
384
This type of good is most likely to suffer
from the tragedy of the commons.
common resources
385
Fish in the ocean exemplify this type of
good.
common resources
386
Rival goods that are not owned are the
primary source of this market
inefficiency.
externalities
387
These degrees of rivalry and
excludability characterize collective
goods.
low rivalry and high
excludability
388
Satellite radio and pay-per-view
television are examples of this type of
good.
collective
389
Governments often regulate this type of
good so monopolies do not limit supply.
collective
390
These degrees of rivalry and
excludability characterize public goods.
low rivalry and low
excludability
391
The marginal cost of public goods is
close to this number.
zero
392
This institution controls most public
goods.
government
393
The radio, tornado sirens, and national
defense are examples of this type of
good.
public
394
This type of good has a high degree of
rivalry and a low degree of
excludability.
common resources
395
This type of good has a high degree of
rivalry and a high degree of excludability.
private
396
This type of good has a low degree of
rivalry and a low degree of
excludability.
public
397
This type of good has a low degree of
rivalry and a high degree of
excludability.
collective
398
A websites is this type of good.
collective
399
The environment is considered to be
this type of good.
common resource
400
City streets are considered to be these
types of goods.
common resources
401
A haircuts is this type of good.
private
402
Gasoline is this type of good.
private
403
Radio broadcasts have this degree of
excludability.
low
404
National defense has this degree of
rivalry.
low
405
Satellite radio has this degree of
excludability.
low
406
Fish in the ocean have this degree of
rivalry.
high
407
Tornado sirens have this degree of
rivalry.
low
408
Haircuts have this degree of
excludability.
high
409
The market converts the desires and
actions of individuals into this type of
outcome.
socially desirable
410
Economists believe that differences in
standards of living arise from variations
in this skill.
decision-making
411
This term refers to the formal and
informal rules of human interaction.
institution
412
Most markets are considered these
types of structures.
institutions
413
This term refers to formal rules and
structures.
organization
414
Institutions and organizations require
this type of interaction to function.
voluntary cooperation
voluntary cooperation
415
Incentives to cheat on voluntary
agreements exist especially in this type
of market.
cartel
416
The government has the unique power
to require this payment from its
citizens.
taxes
417
Citizens are free to perform this action
if they dislike taxation levels in one
area.
migrate
418
Members of this European organization
are free to move from one country to
another.
European Union
419
The United States imposes strict
restrictions on this type of movement.
immigration
420
In the United States, only this political
entity has a monopoly on the legitimate
use of force.
government
421
In the United States, the government
has a monopoly on this form of power.
force
422
The government’s ability to restrain
criminals, compel military service, and
protect national security make up this
legal monopoly.
legitimate use of force
423
The government has the right to use
force in these four areas.
policing, national security,
taxation, and military service
424
These formal documents express
voluntary agreements between two
parties.
contracts
425
Without these institutions, individuals
would be more reluctant to agree to
contracts.
courts
426
The actions of both elected officials and
government employees can best be
described with this adjective.
self-interested
427
This term refers to the tendency of
elected officials to support projects that
bring money into their communities.
pork barrel politics
428
Pork barrel politics has this primary
outcome.
increasing the cost of the
government
429
Elected officials participating in pork
barrel politics want to increase the cost
of this political entity.
government
430
This term refers to vote trading
activities among elected officials.
logrolling
431
United States policy about price
supports for domestic sugar producers
can be described with this political
term.
rent seeking
432
Inefficiencies will arise if government
programs are concentrated but these
economic values are spread widely.
costs
433
Price supports for domestic sugar
producers keeps United States sugar
prices this number of times greater
than word levels.
two
434
A 2017 report estimated that domestic
sugar price supports caused
households to lose money in this
range.
2.4 billion to 4 billion dollars
435
Sugar growers have strong motivations
to hire these individuals to convince
legislators to spend money for price
supports.
lobbyists
436
This term refers to socially
unproductive activities that seek to
redirect economic benefits to one party
rather than another.
rent seeking
437
Competition determines this aspect of
federally supported rent-seeking
activities.
location
438
Determining how the government
should function is considered this type
of economic judgment.
normative
439
This field of study helps answer the
questions of how the government
should function and how big it should
be.
economics
440
Many consumers accept the loss of this
freedom in exchange for the
government’s protection.
individual autonomy
441
Microeconomics primarily focuses on
the interactions of these two economic
phenomena.
supply and demand
442
This point on a supply and demand
graph maximizes the combined
benefits of all market participants.
equilibrium
443
Firms primarily have this role in a
market economy.
suppliers
444
Because of the entry and exit of firms in
a market, firms earn this amount of
economic profit.
zero
445
Imperfect competition takes the form of
one of three types of markets.
monopoly, oligopoly, and
monopolistic
446
Barriers to entry are the primary reason
for this type of competition.
imperfect
447
Total surplus in an imperfectly
competitive market tends to be lower
than it would be in this type of market.
competitive
448
Economic profits incentivize these
individuals to develop new goods and
services.
entrepreneurs
449
Externalities occur when economic
interactions take place outside these
entities.
markets
450
These two dimensions categorize all
goods and services.
rivalry and excludability
451
This factor distinguishes institutions
from organizations.
formality
452
This branch of economics focuses on
the performance of the national
economy.
macroeconomics
453
Issues of national unemployment rates
fall under this branch of economics.
macroeconomics
454
Macroeconomics explores short-run
fluctuations in these two economic
indicators.
unemployment and inflation
455
This branch of economics is concerned
with the long-run growth of the
economy and the standard of living.
macroeconomics
456
These three economic indicators
measure the performance of the
aggregate economy.
gross domestic product, cost
of living, and unemployment
457
Macroeconomics focuses on the
performance of this type of economy.
national
458
Economics often use this economic
indicator to measure national output.
gross domestic product
459
This economic indicator measures the
total amount of goods and services
produced in the economy.
gross domestic product
460
Economists adjust gross domestic
product to remove the effects of this
economic situation.
inflation
461
The total real output of the United
States economy has increased this
number of times since 1900.
40
462
United States output declined most
notably during this historical period.
Great Depression
463
United States output increased most
notably during this world event.
World War II
464
Overall, the output of the United States
economy has followed this direction.
upward
465
This economic activity is the primarily
limiter of consumption.
production
466
The growth of this measure has
primarily driven the United States’
increase in output.
population
467
The population of the United States has
increased by this factor since 1900.
four
468
The average output per person in the
United States has increased by this
factor since 1900.
eight
469
The phrase “per capita” translate to this
English phrase.
per head
470
The phrase “per capita” translate to this
English phrase.
per head
471
The phrase “per capita” originates from
this language.
Latin
472
This term refers to the average amount
of output per worker.
average labor productivity
473
Average labor productivity equals the
total output divided by this value.
total number of workers
474
The average output per person in the
United States was around this number
of dollars in 2019.
65,000
475
This country has five times the United
States’ population.
China
476
China’s population is this number of
times greater than the United States
population.
five
477
China’s production is this factor of the
United States’ production.
two-thirds
478
China’s per capita output is this
percentage of the United States’ per
capita output.
15
479
The countries with the lowest output
per capita are mainly located in these
two regions.
South Asia and Africa
480
This Asian country has a GDP similar
to the United States and Western
Europe.
Japan
481
This region of Europe has higher GDPs
compared to the other regions.
western
482
Because of this economic indicator,
poorer citizens living in advanced
economies have access to better
material goods.
standard of living
483
Quality of life changes in this manner
as output per person increases.
increases
484
Higher levels of this economic activity
ensure longer life, broader access to
education, better healthcare, and a
cleaner environment.
production
485
The decline in real output of the Great
Depression is almost equal to the
increase in real output during this
event.
World War II
486
This twenty-first century year was most
notable for a great recession.
2008
487
This term refers to the economic period
between a trough and a peak in
economic activity.
expansion
488
This term refers to the period between
a peak and a trough in economic
activity.
recession
489
This term refers to a particularly severe
recession.
depression
490
The most severe recession in United
States history occurred between these
two years.
1929 and 1933
491
This term refers to the alteration
between expansion and recession.
business cycle
492
This type of economic period features
declining employment and slower wage
growth.
recession
493
This branch of economics is concerned
with reducing the severity and duration
of recessions.
macroeconomics
494
This term refers to the percentage of
the labor force that seeks but cannot
find work.
unemployment rate
495
The labor force consists of these two
types of workers.
employed and unemployed
496
The unemployment rate rises during
this type of economic period.
recession
497
Unemployment can never reach this
number.
zero
498
This situation arises when all prices
rise together.
inflation
499
This situation arises when a country’s
exports exceed its imports.
trade surplus
500
This situation arises when a country’s
exports are less than its imports.
trade deficit
501
This term refers to the combination of
different factors into a single economic
variable.
aggregation
aggregation
502
Economists use aggregation to study
the behavior of this type of economy.
national
503
This branch of economics uses
economic aggregates.
macroeconomics
504
This term refers to the aggregate of the
value of all final goods and services
produced within a country during a
specific period.
gross domestic product
505
Gross domestic product only includes
this type of goods and services.
final
506
Higher-priced goods will have more of
an influence on this economic indicator
than lower-priced goods.
gross domestic product
507
Market prices reflect the value that this
type of customer places on a specific
good.
marginal
508
These goods are used to produce a
final good.
intermediate goods
509
This macroeconomic indicator does not
include intermediate goods.
gross domestic product
510
Gross domestic product excludes
intermediate goods so that this type of
integration does not affect GDP.
vertical
511
These long-lasting goods are used to
produce other goods and services.
capital goods
512
Machinery and factory buildings are
examples of this type of good.
capital
513
GDP only includes capital goods in this
year.
year they are produced
514
This word indicates that gross domestic
product only considers goods produced
within a country.
domestic
515
Economists usually measure GDP in
these two frequencies.
annual and quarterly
516
GDP would include a house only in this
year.
year it was produced
517
Economists developed methods to
measure GDP during this decade.
1930s
518
This British official was one of the first
to attempt to measure national output.
Sir William Petty
519
Sir William Petty attempted to measure
national output during this century.
mid-seventeenth
520
Sir William Petty wanted to assess the
ability of people in this country to pay
taxes.
Ireland
521
This United States organization sought
to develop a system to measure
national output in 1932.
Department of Commerce
522
The United States Department of
Commerce commissioned this
economist to create a system to
measure national output.
Simon Kuznets
523
Kuznets received this award in
economic science for his developments
in the measurement of national
production.
Nobel Prize
524
Kuznets believed that national defense
should be considered this type of good.
intermediate
525
This economic indicator excludes
goods that are exchanged outside
markets.
gross domestic product
526
This demographic has increasingly
entered the labor force in the past 60
years.
women
527
This economic indicator does not
address the depletion of natural
resources or pollution of the
environment.
gross domestic product
528
This measurement is the total value of
all expenditures within a country.
gross domestic product
529
Purchases fall into these four economic
categories.
households, firms,
government, and foreign
530
This term refers to household
purchases.
consumption expenditures
531
Consumption expenditures fall into
these three main categories.
consumer durables,
nondurables, and services
532
This term refers to long-lasting
consumer goods.
consumer durables
533
Automobiles, washing machines, and
furniture are examples of these types of
household purchases.
consumer durables
534
This term refers to goods that are used
up faster than durable goods.
consumer nondurables
535
Food and clothing are examples of
these types of household purchases.
consumer nondurables
536
These intangible goods are considered
household purchases.
services
537
Education and insurance are examples
of these types of household purchases.
services
538
This term refers to any spending by
firms on final goods and services and
purchasing of new houses.
investment
539
This type of investment includes
factories, offices, machinery, and
equipment.
business fixed investment
540
This type of investment includes new
homes and apartment buildings.
residential fixed investment
541
This type of investment includes unsold
goods and company inventories.
inventories
542
Investments fall into these three
categories.
business fixed investment,
residential fixed investment,
and inventories
543
This term refers solely to the purchase
of new capital goods.
investment
544
Shares of stock or bonds are often
confused with this type of expenditure.
investment
545
These types of purchases include all
goods and services bought by federal,
state, and local governments.
government
546
The wages of firefighters and teachers
fall under this category of expenditures.
government purchases
547
Social Security benefits fall under this
category of payment.
transfer
548
This term is the difference between
exports and imports.
net exports
549
This term refers to domestically
produced goods sold to foreigners.
exports
550
Adding these four purchases gives
gross domestic product.
consumption, investment,
government spending, and
net exports
551
Economists view income as equal to
this economic indicator.
gross domestic product
552
These three terms can interchangeably
describe gross domestic product.
production, expenditures,
and income
553
Economists use these two economic
values to calculate gross domestic
product.
quantity and price
554
Economists seek to separate changes
in this value from changes in the
quantity of goods and services
produced.
price
555
This type of gross domestic product
uses prices from a single year to
measure production in each year.
real
556
This economic value remains constant
in calculations of real gross domestic
product.
price
557
This version of gross domestic product
is calculated with current year prices.
nominal GDP
558
This United States organization
calculates the Consumer Price Index.
Bureau of Labor Statistics
559
The Bureau of Labor Statistics
calculates the Consumer Price Index
with this frequency.
monthly
560
The Consumer Price Index was created
to measure this economic indicator.
inflation
561
This statistic measures the cost of a
certain basket of goods and services
representing the consumption of a
typical consumer.
Consumer Price Index
562
The Bureau of Labor Statistics collects
data through this method.
surveys
563
The Bureau of Labor Statistics
oversees this survey.
Consumer Expenditure
Survey
564
The Consumer Price Index is
expressed as this type of number.
index
565
To arrive at the Consumer Price Index,
economists divide the cost of bundle
each year by the cost of the bundle in
this year and then multiply by 100.
base
566
The benefits of this government
program are adjusted based on the
Consumer Price Index.
Social Security
567
The Consumer Price Index is intended
to reflect changes in this cost.
cost of living
568
Employers adjust wages based on this
economic indicator.
Consumer Price Index
569
This economic statistic will often
overstate the true cost of living.
Consumer Price Index
570
These three factors cause the upward
bias of the Consumer Price Index.
substitution bias,
unmeasured quality change,
and new goods and services
571
This bias in the Consumer Price Index
occurs as households consume less
expensive goods.
substitution bias
572
Consumers switching from beef to less-
expensive chicken is an example of this
bias.
substitution bias
573
This bias in the Consumer Price Index
occurs when goods and services get
more advanced over time.
unmeasured quality change
574
The development of increased
processor speeds and greater storage
of computers is an example of this bias.
unmeasured quality change
575
This bias in the Consumer Price Index
occurs because of new technological
innovations.
new goods and services
576
The development of the cell phone is
an example of this bias in the
Consumer Price Index.
new goods and services
577
This economic project reviewed the
methods used to calculate the
Consumer Price Index and determined
that the index overstated the rate of
price inflation.
Boskin Commission
578
This economist led the Boskin
Commission.
Michael Boskin
579
The Boskin Commission determined
that the Consumer Price Index
overstates the rate of price inflation by
this percentage each year.
1.3
580
This economic indicator measures the
relationship between real and nominal
GDP.
GDP deflator
581
The GDP deflator is a ratio of these two
values.
nominal and real GDP
582
This economic indicator is considered
less volatile than the Consumer Price
Index.
GDP deflator
583
This type of good has a larger effect on
the Consumer Price Index than the
GDP deflator does.
foreign-produced
584
In the 1970s, rises in prices of this
good in had a major impact on the
Consumer Price Index.
oil
585
The GDP deflator weighs prices by
production in this year.
current year
586
Workers feel secure about their jobs
when this economic indicator is low.
unemployment rate
587
This rate is the percentage of the labor
force that cannot find employment.
unemployment rate
588
This government agency measures the
unemployment rate in the United
States.
Bureau of Labor Statistics
589
The Bureau of Labor Statistics surveys
this number of households to measure
the unemployment rate.
60,000
590
The Bureau of Labor Statistics surveys
households with this frequency to
determine the unemployment rate.
monthly
591
Interviewers categorize individuals
above this age to determine the
unemployment rate.
16
592
Someone working part-time for pay is
in this employment category.
employed
593
Someone on sick leave is in this
employment category.
employed
594
Someone who tried unsuccessfully to
find employment during the past four
weeks is in this employment category.
unemployed
595
Someone who did not work during the
past week and did not seek
employment the past four weeks is in
this employment category.
out of the labor force
596
According to the Bureau of Labor
Statistics estimates, approximately this
number of working-age individuals live
in the United States.
260 million
597
According to the Bureau of Labor
Statistics estimates, the United States
labor force has approximately this
number of individuals.
160 million
598
This ratio relates the individuals in the
labor force to those in the working-age
population.
labor force participation rate
599
The United States labor force
participation rate is approximately this
percentage.
61.4
600
As of July 2020, economists estimate
that this number of people were
unemployed in the U.S.
16.3 million
601
As of July 2020, the unemployment
rate in the United States was
approximately this percentage.
10.2
602
The unemployment rate of the United
States in 2019 was approximately this
percentage.
3.4
603
This demographic has the highest
unemployment rate compared to other
age groups.
teenagers
604
Unemployment is divided into these
three subcategories.
frictional, structural, and
cyclical
605
This type of unemployment involves
delay in matching employers and
employees.
frictional
606
This type of unemployment occurs
when workers are unemployed for short
amounts of time.
frictional
607
This type of unemployment involves a
mismatch between the skills of
jobseekers and the requirements of
employers.
structural
608
This United States industry’s collapse
in the 1980s is an example of structural
unemployment.
steel
609
A decrease in unemployment, an
increase in layoffs, and a decrease in
new hires characterize this type of
economic period.
recessions
610
Recessions cause this type of
unemployment.
cyclical
611
Economists estimate that GDP per
capita in the United States grew by this
factor from 1900 to 2019.
nine
612
This term refers to the improvement in
living standards due to the developing
economy.
economic growth
613
These two world regions have seen
sustained economic growth in the past
200 years.
United States and Western
Europe
614
This model shows the flow of money
throughout the economy.
circular flow model
615
The circular flow model includes these
three sets of economic actors.
households, firms, and
government
616
Households in the circular flow model
receive this type of payment for
providing labor.
income
617
The factors of production in the circular
flow model can be broken down into
these three categories.
labor, capital, and land
618
In the circular flow model, households
use their income to perform these three
economic activities.
purchase goods and
services, pay taxes, and
save through financial
markets
619
Firms earn this type of economic gain
from selling their goods and services.
revenue
620
The government receives money from
households through this form of
payment.
taxes
621
Economists calculate real GDP per
capita by multiplying the fraction of the
population that is employed by this
economic value.
real GDP per worker
622
The average quantity of goods and
services available primarily depends on
this economic value.
average labor productivity
623
Labor force participation rates have
increased as this demographic has
entered the labor force in the last
century.
women
624
The twentieth-century increase in
output per person rests primarily on the
increase of this economic value.
average labor productivity
625
Average labor productivity depends on
these five categories.
physical capital, human
capital, natural resources,
technological knowledge,
and political and legal
environment
626
This category of labor productivity
refers to the advancement of tools,
machinery, and other manufacturing
methods.
physical capital
627
In order to increase future capital stock,
economic actors must give up this
economic activity.
consumption
628
This term refers to the skills that
workers gain through education and
work experience.
human capital
629
This category of labor productivity is
based on the resources that countries
or regions possess.
natural resources
630
This category of labor productivity
refers to specialized information about
new technological innovations.
technological knowledge
631
This category of labor productivity is
considered the most important factor to
increase average labor productivity.
technological knowledge
632
The moving assembly line is an
example of this category of labor
productivity.
technological knowledge
633
The political and legal environment
governs the way in which the
government spreads this type of
knowledge.
technological
634
The government’s promotion of
technological innovation allowed these
three Asian countries to experience
rapid growth in standards of living.
Japan, South Korea, and
China
635
In this Asian country, the government
has not exploited the full potential of
modern manufacturing techniques.
North Korea
636
This development sector focuses on
creating new technological knowledge.
research and development
637
This term refers to an individual’s
possession of more income than they
desire to spend.
saving
638
This term refers to the purchase of new
capital equipment.
investment
639
Individuals can supply investment
funding to other parties through these
institutions.
financial markets
640
Corporations can sell this economic
asset to borrow directly from the public.
bonds
641
The loan on a bond must be repaid
before this date.
date of maturity
642
This certificate of indebtedness states
the obligations of the borrower.
bond
643
A bond loans this original amount.
principal
644
The risk of price changes in a bond
rises with the length of this property.
maturity
645
This situation arises when a borrower
fails to pay some or all the principal or
interest on a bond.
default
646
This property of a bond increases as
the risk of defaulting increases.
interest rate
647
This entity is an especially safe credit
risk for bonds.
United States government
648
Companies sell these shares for part
ownership in a business.
stocks
649
This type of finance involves the sale of
shares of stock.
equity
650
This type of finance involves the sale of
bonds.
debt
651
Companies typically pay their
shareholders through this form of
quarterly payment.
dividends
652
This type of expenditure includes new
issues of stock.
investment
653
This term refers to a third party that
links two other parties.
intermediary
654
These two financial intermediaries are
considered the most important.
banks and mutual funds
655
This financial intermediary accepts
deposits from individuals who wish to
save money and allows individuals to
borrow money.
banks
656
Banks provide this type of account to
facilitate purchasing goods and
services.
checking
657
This financial intermediary purchases a
wide variety of stocks and bonds and
sells its shares to savers.
mutual funds
658
This financial intermediary allows
people to access the skillsets of
professional money managers.
mutual funds
659
In a closed economy, this economic
value is zero.
net exports
660
In a closed economy, savings always
equals this expenditure.
investment
661
Subtracting government spending from
net taxes gives this economic value.
government saving
662
A government with negative savings
runs this type of budget.
budget deficit
663
This term refers to the difference in the
purchase of foreign assets by domestic
residents and the purchase of domestic
assets by foreigners.
net capital outflow
664
These two types of investment make
up international capital flows.
foreign direct investment and
portfolio investment
665
Net capital outflows exactly equal this
economic value in an open economy.
net exports
666
Domestic saving equals domestic
investment plus this economic value.
net capital outflows
667
Adjusting this economic value can
equalize the supply and demand for
savings.
interest rate
668
The interest rate functions as this
aspect of a loan in a financial market.
price
669
This type of relationship exists between
the interest rate and quantity of
savings.
positive
670
The demand curve for savings has this
slope.
downward
671
Interest rates above equilibrium would
produce an excess of this economic
value.
funds
672
This term refers to the tendency of
government deficits to reduce private
investment.
crowding out
673
The supply of savings curve will shift in
this direction if the government wants
to encourage savings.
rightward
674
This economic innovation allows
individuals to exchange goods in our
economy, without having to barter.
money
675
This economic phenomenon occurs
when too much money circulates in an
economy.
inflation
676
Economists believe that money has
these three main functions.
medium of exchange, unit of
account, and store of value
677
This term refers to an item that
consumers can use when purchasing
goods and services.
medium of exchange
678
Money that consumers hold even
though it earns no interest serves this
function.
medium of exchange
679
This term refers to a yardstick used to
establish the value of goods and
services.
unit of account
680
This term refers to an item that
consumers can use to transfer
purchasing power from the present to
the future.
store of value
681
Money that consumers hold for weeks
or months before purchasing goods is
serving this function.
store of value
682
Economists use this term to describe
all the different methods of storing
value in an economy.
wealth
683
This term refers to the ease with which
an asset can be converted into a
medium of exchange in an economy.
liquidity
684
Economists consider this asset to be
the most liquid.
currency
685
Money typically falls into these two
categories.
fiat and commodity
686
This term refers to money with intrinsic
value, such as gold or silver.
commodity money
687
This term refers to money with no
intrinsic value, such as a dollar bill.
fiat money
688
This term refers to bills and coins to
which the public has access.
currency
689
Currency and demand deposits fall
under this economic measure.
M1
690
Savings deposits and all M1 fall under
this economic measure.
M2
691
This economic system is the central
bank of the United States.
Federal Reserve System
692
This economic system is the central
bank of the United States.
Federal Reserve System
693
These economic institutions act as
lenders of last resort when a member
bank cannot obtain funds from other
sources.
Federal Reserve banks
694
This economic committee oversees the
money supply of the United States.
Federal Open Market
Committee
695
The Fed can adjust the money supply
through this type of economic
operation.
open market
696
The Fed will purchase this economic
asset if it wishes to increase the money
supply.
government bonds
697
This term refers to the money that the
banking sector creates from each dollar
of reserves.
money multiplier
698
Calculating the reciprocal of this
economic value gives the money
multiplier.
reserve ratio
699
This term refers to the amount of
currency added to reserves.
monetary base
700
This phrase is an alternate term for the
monetary base.
high-powered money
701
This federal requirement sets the
minimum amount of reserves banks
must hold.
reserve requirement
702
This term refers to the interest rate that
the Federal Reserve charges on loans
it makes to banks.
discount rate
703
This term refers to the rate banks
charge when they lend reserves to
other banks.
federal funds rate
704
This term refers to a rush of
withdrawals at a bank.
bank run
705
Banks whose assets exceed their
liabilities are in this state.
solvent
706
The Consumer Price Index has
increased by this factor from 1960 to
2019.
8.6
707
Interaction between these two
economic principles determines the
value of money.
supply and demand
708
As this economic value increases,
consumers need less money to buy a
given amount of goods and services.
value of money
709
This economic principle expresses the
fact that changes in the quantity of
money do not affect real quantities in
the economy.
neutrality of money
710
This type of quantity is measured in
physical units, such as bushels of
wheat.
real
711
This term refers to the average number
of times a dollar bill is used in one year.
velocity of money
712
The number of dollars in circulation
multiplied by this economic value
equals the price level multiplied by the
real GDP.
velocity of money
713
This economic phenomenon reduces
the value of money in the economy.
inflation
714
Inflation often distorts this economic
value.
price
715
Macroeconomics focuses on these
short-term economic issues.
fluctuations
716
This economic organization officially
defined recessions and expansions in
the United States economy.
National Bureau of
Economic Research
717
This term refers to a particularly severe
recession that occurs for a prolonged
period.
depression
718
Industrial societies have experienced
business cycles since this century.
late eighteenth
719
Recessions occur when real GDP
declines for at least this number of
consecutive quarters.
two
720
The Great Depression featured an
economic decline that lasted this
number of months.
43
721
The actual GDP of an economy
consists of these two economic
properties.
potential output and output
gap
722
This term refers to the output that an
economy can produce when resources
are used at normal rates.
potential output
723
The type of output is the difference
between actual output and this
economic value.
potential output
724
This term refers to unemployment that
arises from frictional and structural
issues.
natural rate of
unemployment
725
The natural rate of unemployment
occurs when potential output equals
this economic value.
potential output
726
This economist determined that every
one percent change in cyclical
unemployment correlated with a two
percent change in the output gap.
Arthur Okun
727
Arthur Okun was chief economic
advisor to this president.
John F. Kennedy
728
In the short run, firms adjust this
economic activity before adjusting
prices to respond to changes in
demand.
production
729
This term is the total spending on final
goods and services by all consumers in
an economy.
aggregate demand
730
In the long run, firms will adjust this
economic value to respond to
variations in demand.
price
731
This economist wrote the 1936 book
The General Theory of Employment,
Interest, and Money.
John Maynard Keynes
732
John Maynard Keynes developed this
macroeconomic model of the economy
to account for economic depressions.
Keynesian model
733
The Keynesian theory states that short-
run fluctuations in the economy result
from the interaction between these two
macroeconomic values.
aggregate demand and
aggregate supply
734
This type of relationship exists between
aggregate demand and aggregate price
level.
negative
735
Aggregate demand and aggregate
price level have a negative relationship
primarily for these three reasons.
wealth effects, interest rate
effects, and foreign
736
This economic principle expresses the
fact that lower prices increase
consumer wealth and encourage
spending.
wealth effects
737
This economic principle expresses the
fact that at a lower domestic price level,
domestic goods will become less
expensive relative to foreign goods,
causing net exports to increase.
foreign exchange effects
738
A reduction in consumer spending will
shift the AD curve in this direction.
leftward
739
The aggregate supply curve slopes in
this direction.
upward
740
The short-run aggregate supply curve
shifts mainly for these two reasons.
expected price level changes
and aggregate supply
shocks
741
Changes in weather and climate
conditions are these types of shocks.
aggregate supply shocks
742
Cyclical unemployment equals this
value when actual output is equal to
potential output.
Zero
743
In 1973, a shortage of petroleum and
higher prices of gasoline shifted the
short-run aggregate supply curve in this
direction.
Leftward
744
In the United States, the aggregate
price level has followed an upward
trend since this historical event.
World War II
745
In the Keynesian model, an increase in
money supply shifts the aggregate
demand curve in this direction.
rightward
746
This term refers to increased
government spending.
expansionary fiscal policy
747
Fiscal policy can be used to increase
spending through these types of
actions.
Tax Cuts
748
This economic organization can vary
the money supply to control the interest
rate.
Federal Reserve
749
Economists can calculate initial
estimates of GDP in about this number
of months.
three
750
Most economists believe that these
types of policies are counterproductive
in mitigating the effects of a recession.
activist
