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FBLA Region '23 > Economics > Flashcards

Economics Flashcards

1
Q

Human Capital

A

the skills, knowledge, and experience possessed by an individual or population, viewed in terms of their value or cost to an organization or country

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2
Q

money

A

any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context

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3
Q

elements of capitalism

A

private ownership, the motive for profit, the ability for businesses to compete in the free market, and minimal intervention in government

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4
Q

voluntary exchange

A

the act of buyers and sellers freely and willingly engaging in market transactions

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5
Q

equity

A

or economic equality, is the concept or idea of fairness in economics, particularly in regard to taxation or welfare economics

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6
Q

factors of production

A

land, labor, capital, entrepreneurship

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7
Q

market value

A

how much something is worth in a competitive marketplace

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8
Q

CPI

A

consumer price index; measures inflation and purchasing power; measures the average change in price over time of a market basket of consumer goods and services

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9
Q

components of GDP

A

consumption, investment, government expenditure, net exports

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10
Q

“Investment” in GDP

A

purchase of new capital goods

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11
Q

“consumption” in GDP

A

private consumption expenditures by households and non-profit organizations

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12
Q

capital stock

A

value of a company’s shares held by outside investors

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13
Q

GNP

A

gross national product; value of all products and services produced by the citizens of a country both domestically, and internationally

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14
Q

NDP

A

net domestic product; gross domestic product minus depreciation on a country’s capital goods

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15
Q

NI

A

national income; the money value of all the final services and goods produced in an economy during a given period of time. It includes the incomes of all factors of production, such as rent, wages, profits, and interest

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16
Q

PI

A

personal income; personal income refers to the total earnings of an individual from various sources such as wages, investment ventures, and other sources of income

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17
Q

NI vs. PI

A

Personal income refers to the money received by factors of production, whereas national income represents the income generated by these factors

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18
Q

DI

A

disposable income; income minus taxes

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19
Q

absolute advantage

A

The ability of an actor to produce more of a good or service than a competitor

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20
Q

comparative advantage

A

The ability of an actor to produce a good or service for a lower opportunity cost than a competitor

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21
Q

balance of trade

A

difference between a country’s imports and exports

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22
Q

Currency appreciation and depreciation

A

value of currency increases or decreases over time

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23
Q

monopolistic competition

A

a type of imperfect competition such that there are many producers competing against each other, but selling products that are differentiated from one another and hence are not perfect substitutes (Restaurants, hair salons, household items, and clothing)

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24
Q

oligopolisitc competition

A

a competitive situation in which there are only a few sellers (of products that can be differentiated but not to any great extent); each seller has a high percentage of the market and cannot afford to ignore the actions of the others (automobiles, airlines, pharmaceuticals)

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25
Q

imperfect competition

A

the situation prevailing in a market in which elements of monopoly allow individual producers or consumers to exercise some control over market prices (includes monopolies and oligopolies)

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26
Q

perfect competition

A

market in which buyers and sellers are so numerous and well informed that all elements of monopoly are absent and the market price of a commodity is beyond the control of individual buyers and sellers (agricultural markets, foreign currency exchange markets)

27
Q

monopsony

A

market structure with only one buyer (U.S. government, miners in mining towns)

28
Q

antitrust laws

A

prohibit conduct by a single firm that unreasonably restrains competition by creating or maintaining monopoly power

29
Q

stock market

A

process and facilitation of investors buying and selling stocks with one another

30
Q

stock exchange

A

the actual intermediary that connects buyers with sellers (NYSE)

31
Q

stock index

A

numerical representation of a group of stocks that is used to track their collective performance (S&P 500, Dow Jones, Nasdaq)

32
Q

Who controls interest rates?

A

The Federal Reserve

33
Q

Income tax

A

levied by federal and most state governments; “progressive”

34
Q

Sales tax

A

levied by state governments; “regressive”

35
Q

Property tax

A

levied by local governments; “regressive”

36
Q

Excise tax

A

Excise taxes are taxes imposed on certain goods, services, and activities. Taxpayers include importers, manufacturers, retailers, and consumers, and vary depending on the specific tax (can be levied by federal, state, and local governments)

37
Q

Specific tax

A

refers to the excise tax imposed which is based on weight or volume capacity or any other physical unit of measurement

38
Q

Ad Valorem or Value-added tax

A

refers to the excise tax which is based on selling price or other specified value of the goods/articles

39
Q

Monetary policy

A

revising interest rates and changing bank reserve requirements (controlled by the Fed)

40
Q

When the Fed lowers interest rates…

A

financial institutions can procure funds at low interest rates. This enables them to reduce their lending rates on loans to firms and households.

41
Q

fiscal policy

A

the use of government taxing and spending to influence a country’s economy; influences aggregate supply and demand (controlled by the executive and legislative branch) (two main tools of fiscal policy are taxes and gov’t spending)

42
Q

Expansionary fiscal policy

A

increases aggregate demand directly through an increase in government spending (“loose”)

43
Q

reserve ratio/reserve requirement

A

sets the minimum amount that a commercial bank must hold in liquid assets

44
Q

open market operations

A

the purchase and sale of securities in the open market by a central bank to manage the money supply

45
Q

Discount rate/bank rate

A

rate of interest which a central bank charges on its loans and advances to a commercial bank

46
Q

Corporation

A

a company or group of people authorized to act as a single entity (legally a person) and recognized as such in law, limited liability (Double tax: The profit of a corporation is taxed to the corporation when earned, and then is taxed to the shareholders when distributed as dividends)

47
Q

sole proprietorship

A

(unlimited personal liability) (self-employment tax, income tax)

48
Q

partnership

A

(Unlimited personal liability unless structured as a limited partnership)(Self-employment tax (except for limited partners, income tax) (no more than 50 members)

49
Q

Limited liability company (LLC)

A

(One or more people) (Owners are not personally liable) (Self-employment tax, Personal tax or corporate tax)

50
Q

Non-profit corporation

A

(Tax-exempt, but corporate profits can’t be distributed)

51
Q

labor union

A

organization of workers intent on “maintaining or improving the conditions of their employment (“organized labor”)

52
Q

circular flow model

A

model of the economy in which the major exchanges are represented as flows of money, goods and services, etc. between economic agents. The flows of money and goods exchanged in a closed circuit correspond in value, but run in the opposite direction.

53
Q

4 factors of production

A

land, labor, capital, entrepreneurship

54
Q

business cycle

A

expansion, peak, contraction, and trough

55
Q

production possibility frontier

A

illustrates the possible quantities that can be produced of two products if both depend upon the same finite resource for their manufacture

56
Q

brokerage firm

A

middleman who connects buyers and sellers to complete a transaction for stock shares, bonds, options, and other financial instruments

57
Q

capital deepening

A

capital per worker is increasing

58
Q

capital widening

A

situation where the stock of capital is increasing at the same rate as the labor force and the depreciation rate, thus the capital per worker ratio remains constant

59
Q

money growth

A

an increase in the amount of money in an economy; money supply

60
Q

lagging economic indicator

A

an economic statistical indicator that changes after macroeconomic conditions have already changed

61
Q

elasticity

A

measures change in quantity relative to change in PRICE

62
Q

Earned Income Tax Credit

A

a federal tax credit for working people with low and moderate incomes; It boosts the incomes of workers paid low wages while offsetting federal payroll and income taxes

63
Q

What caused stagflation in the 70s?

A

monetary and fiscal policy; oil embargo

FBLA Region '23 (9 decks)

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