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Praxis 5081 Social Studies Content Knowledge > Economics > Flashcards

Economics Flashcards

1
Q

economics

A

the study of human behavior in response to the production, consumption, and distribution of assets or wealth

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2
Q

subgroups of economics

A

microeconomics macroeconomics

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3
Q

microeconomics

A

the study of individual or small group behaviors and patterns in relationship to such things as earning and spending money

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4
Q

macroeconomics

A

focuses on how a society or nation’s goods, services, spending habits, and other factors affect the people of that entity

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5
Q

scarcity

A

created through limited resources and high demands

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6
Q

economic systems

A

determine what is being produced, who is producing it, who receives the product, and the money generated by the sale of the product

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7
Q

types of economic systems

A

market economies and planned or command economies

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8
Q

market economies

A
  • privately owned businesses, groups, or individuals providing goods or services based on demand
  • the types of goods and services provided (supply) are based on that demand
  • two types: competitive market and free market
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9
Q

competitive market

A

due to the large number of both buyers and sellers, there is no way any one seller or buyer can control the market or price

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10
Q

free market

A

voluntary private trades between buyers and sellers determine markets and prices without government intervention or monopolies

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11
Q

planned or command economies

A
  • the government or central authority determines market prices of goods and services
  • government or central authority determines what is being produced as well as the quantity of production
  • some advantages to command economies include a large number of shared goods such as public service (transportation, schools, or hospitals)
  • disadvantages include wastefulness of resources
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12
Q

factors of production

A

used to create goods and services to make economic profit

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13
Q

four factors of production

A

land: both renewable and nonrenewable resources
labor: effort put forth by people to produce goods and service
capital: the tools used to create goods and services
entrepreneurship: persons who combine land, labor, and capital to create new goods and services

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14
Q

supply

A

amount of a product that a market can offer

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15
Q

demand

A

the quantity of a product needed or desired by buyers

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16
Q

taxes

A
  • generate government revenue
  • discourage purchase or use of “bad” products such as alcohol or cigarettes
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17
Q

subsidies

A
  • lower the price of goods and services
  • reassure the supply of goods and services
  • allow opportunities to compete with overseas vendors
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18
Q

price controls

A
  • act as emergency measures when government intervention is necessary
  • set a minimum or maximum price for goods and services
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19
Q

distribution of income

A

how wages are distributed across a society or segments of a society

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20
Q

product market

A

places where goods and services are bought and sold

21
Q

Gross Domestic Product (GDP)

A

monetary measure of goods and services made either quarterly or annually

22
Q

perfect competition

A
  • several businesses are selling the same product at the same time
  • so many businesses and consumers that none will directly impact the market
  • each business and consumer is aware of the competing businesses and markets
23
Q

profit maximization

A
  • firms decide the quantity of a product that needs to be produced in order to receive maximum profit gains. profit is the total amount of revenue made after subtracting costs.
24
Q

short run

A
  • a short amount of time where fixed prices cannot be adjusted
  • the quantity of the product depends on the varying amount of labor. less labor means less product
25
Q

long run

A
  • an amount of time where fixed prices can be adjusted
  • firms try to maximize production while minimizing labor costs
26
Q

types of unemployment

A

cyclical, frictional, and structural

27
Q

cyclical unemployment

A

the product of business cycle. this usually occurs during a recession

28
Q

frictional unemployment

A

the difficulty of matching qualified workers for specific jobs. an example would be a person changing careers.

29
Q

structural unemployment

A

when a person no longer qualifies for a specific job, or failing out of a retraining course for a job

30
Q

inflation

A

cost of goods and services rise over time

31
Q

Consumer Price Index (CPI)

A

tracks price changes of goods and services over time

32
Q

hyperinflation

A

when inflation rates increase to over 50 percent

33
Q

deflation

A

cost of goods and services decrease over time, inflation rates drop below zero percent

34
Q

business cycle

A

when the GDP moves downward and upward over a long-term growth trend. this helps determine where the economy currently stands and where it could be heading.

35
Q

phases of business cycle

A

expansion
peak
contraction
trough

36
Q

expansion phase

A
  • increased employment rates and economic growth
  • production and sales increase
  • on a graph, expansion is where the lines climb
37
Q

peak phase

A
  • employment rates are at or above full employment and the economy is at a maximum productivity
  • on a graph, the peak is the top of the hill, where expansion as reached its maximum
38
Q

contraction phase

A
  • when growth is on the rise
  • unemployment is on the rise
  • on a graph, it is where the graph begins to slide back down or contract
39
Q

trough phase

A
  • the cycle has hit bottom and is waiting for the next cycle to start again
  • on a graph, it is the bottom of the contraction prior to when it starts to climb back up
40
Q

fiscal policy

A

the government is involved in adjusting spending and tax rates to assist the way in which an economy financially functions

41
Q

forms of money

A

commodity, fiat, and bank

42
Q

commodity money

A

money as a valuable good, such as precious metals

43
Q

fiat money

A

the value of the good set by supply and demand rather than the actual value it represents, such as paper money

44
Q

bank money

A

money that is credited by a bank to those who deposit it into bank accounts, such as checking and savings accounts or credit

45
Q

3 main purposes of the Central Bank

A
  • manage monetary growth to help steer the direction of the economy
  • be a backup to commercial banks that are suffering
  • provide options and alternatives to government taxation
46
Q

types of monetary policy

A

expansionary monetary policy & contractionary monetary policy

47
Q

expansionary monetary policy

A
  • increases the money supply
  • lowers unemployment
  • increases consumer spending
  • increases private sector borrowing
  • possibly decreases interest rates to very low levels, even near zero
  • decreases reserve requirements and federal funds
48
Q

contractionary monetary policy

A
  • decreases the money supply
  • helps control inflation
  • possibly increases unemployment due to slowdowns in economic growth
  • decreases consumer spending
  • decreases loans and/or borrowing

Praxis 5081 Social Studies Content Knowledge (6 decks)

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