Economics

Question 1

Retaliatory Tariff

Answer 1

when Country A places a tariff on Country B’s imports because Country B placed a tariff on Country A’s imports

Question 2

Trade Cap

Answer 2

A limit to the amount of a good that can be imported or exported

Question 3

North American Free Trade Agreement (NAFTA)

Answer 3

A trade agreement that created a free trade zone between the US, Canada, and Mexico

Question 4

Progressive Era

Answer 4

The rapid economic expansion of the Second Industrial Revolution also led to an increase in the difference between the haves and the have-nots, as well as the growth of oligopolies and monopolies

Question 5

Mercantilism

Answer 5

The economic idea that a country needs to amass wealth through more exporting than importing and measures wealth by the amount of gold that a nation possesses.

Example: The British thought that colonies should provide raw goods for cheap to them (cotton) and pay for manufactured goods from them (textiles).

Question 6

Second Industrial Revolution

Answer 6

the unprecedented increase in economic productivity during the late 1800s. Included large leaps forward in technology with expansion of use of electricity, petroleum, and steel.

Question 7

United Nations

Answer 7

A global organization established in 1945 following World War II. Dedicated to international peace and stability.

Question 8

Equilibrium (of a market)

Answer 8

when the quantity supplied is equal to the quantity demanded

Question 9

Demand

Answer 9

The quantity of a good that consumers desire to purchase at a given time in an economy

Question 10

European Union (EU)

Answer 10

An economic union of over 25 European states. Includes a shared currency, the Euro.

Question 11

Scarcity

Answer 11

In Economics, the fact that there are not enough resources to fulfill all human needs and desires

Question 12

Barrier to entry

Answer 12

when obstacles prevent new companies from entering the market

Example: Government regulations or high start-up costs

Question 13

Trade Deficit

Answer 13

buying more than they are selling

Question 14

Supply

Answer 14

The quantity of a good produced at a given time in an economy

Question 15

Fixed Currency

Answer 15

a fixed currency has a value established against gold or another precious metal

Example: The English Pound was once redeemable for a pound of sterling silver.

Question 16

Caveat Emptor

Answer 16

“buyer beware” – a consumer is responsible for checking the quality of a product or service before making the purchase

Question 17

Mixed Economy

Answer 17

a market economy with varying levels of government intervention

Question 18

Oligopoly

Answer 18

A market where only a few sellers are present

Example: the mail market with limited options to choose from:USPS, UPS, FedEx

Question 19

Tariff

Answer 19

a tax placed on a specific type of imported or exported good

Example: The United States has a tariff on imported Steel to help protect American Steel Manufacturers from foreign producers

Question 20

Price Controls

Answer 20

A maximum price set by the government allowed to be charged for a particular good

Question 21

World Wars

Answer 21

WWI and WWII occuring overseas (with the exception of Pearl Harbor) allowed the US to maintain and grow its production capacity, leading to massive economic expansions

Question 22

Market Economy

Answer 22

An economic system where decisions about production, consumption and investment are guided by the price of goods and services, which are determined by the laws of supply and demand.

Example: Capitalism

Question 22

market

Answer 22

a space in which goods are exchanged

Question 22

Pure Competition (or perfect competition)

Answer 22

market where products are almost exactly the same and there are infinite competitors

Example: market for mortgage: multiple sellers are offering essentially the same good (money) to a buyer.

Question 23

Sherman Anti-Trust Act

Answer 23

Regulated business practices.

Question 24

Competition (economics)

Answer 24

companies will strive for a greater share of the market by producing higher quality and more cheaply priced goods Example: Apple and Microsoft competing over laptop share

Question 25

Specialization

Answer 25

A tendency for groups to focus and work on (specialize) wherever they can make the best product at the highest revenue (comparative advantage) and use trade to acquire other products

Question 26

Traditional Economy

Answer 26

An economy where goods are produced mainly for consumption by one's own family and traded or bartered in only the most basic ways Example: a community mostly practicing subsistence farming

Question 27

Cost-Benefit Analysis

Answer 27

systematic approach used to evaluate the potential benefits and costs of a proposed project, investment, or decision, aiming to determine whether the benefits outweigh the costs and justify the undertaking

Question 28

Subsidies

Answer 28

Government payments to an industry to reduce costs or create false demand Example: Farm subsidies in the US

Question 29

great depression

Answer 29

an unprecedented period of worldwide economic downturn that began in Oct. 1929 with the United States stock market crash and ended due to a combination of the New Deal and World War II

Question 30

The new deal

Answer 30

A series of policies, public work projects, and financial reforms passed by Franklin D. Roosevelt between 1933 and 1936 in an attempt to stimulate the economy Example: Social Security, unemployment benefis, FDIC

Question 31

Sole proprietorships

Answer 31

a business where a single person acts as the owner and operator of the business with no distinction between the person and the business

Question 32

Supply Side Economics / Reaganomics

Answer 32

the belief that government intervention in trade should focus on increasing the ability of suppliers to produce. This policy dominated the 1980s Example: Governments might lower barriers to entry in markets through the reduction of regulation and taxation.

Question 33

Law of demand

Answer 33

as the price of a good increases, the less quantity of the good will be demanded Example: If the price of a loaf of bread increased to $10, people would buy less bread.

Question 34

Socialism

Answer 34

an economic system in which the means of production are owned by the people, represented by the government. The government often also provides many social services to the population to achieve equality. Example: Soviet Union

Question 35

Capital Resources

Answer 35

Any asset that is not valued for itself but because it allows you to produce something else

Question 35

Deficit

Answer 35

when the quantity demanded exceeds the quantity supplied

Question 36

Law of supply

Answer 36

as the price of a good increases, a greater quantity of the good will be supplied Example: If gum increases from $1 a piece to $10 a piece, then more suppliers would supply gum.

Question 37

Comparative Advantage

Answer 37

The ability of an entity to produce a good or service at a lower opportunity cost than another entity. Example: Company A produces 10 tons of wheat and B produces 5 tons. If they both switch to cotton, each could produce 5 tons. Company B has the comparative advantage of producing cotton because they would give up less wheat for the same output of cotton.

Question 38

Communism

Answer 38

A political theory and economic system in which all property is publicly owned and each person works and is paid according to their abilities and needs. Example: Vietnam

Question 39

Globalism

Answer 39

Economic and foreign policy planning on a global basis

Question 40

Specialization of labor / Division of labor

Answer 40

A tendency for groups to focus and work on (specialize) wherever they can make the best product at the highest revenue (comparative advantage) and use trade to acquire other products

Question 40

Adam Smith

Answer 40

The father of capitalism. Wrote "An Inquiry into the Nature and Causes of the Wealth of Nations." Argued that an invisible hand guides the economy to its greatest productivity.

Question 41

Perceived Value

Answer 41

how desirable a product is to the consumer

Question 42

Macroeconomics

Answer 42

The design and function of the economy as a whole

Question 43

Monopoly

Answer 43

market where one firm controls the price, production, and supply of a good Example: Until 1982, AT&T managed ALL phone service in the United States

Question 44

OPEC (organization of petroleum exporting countries)

Answer 44

An international organization of countries that produce the majority of the world's oil supply. Current member states range in location from South America to central Africa with the majority of member states located in the Middle East.

Question 45

Circular flow

Answer 45

Movement in an economy of good, services, and money from consumers to producers and back again

Question 46

Absolute Advantage

Answer 46

The ability of an entity to produce more of a good or service than another entity using the same amount of resources. Example: If person A can produce 10 widgets with 10 tools and person B can produce only 5 widgets with 10 tools, person A has the absolute advantage of making widgets.

Question 47

Floating currency

Answer 47

a floating currency is priced in relation to the values of other currencies Example: Most modern currency, like the US dollar

Question 48

Corporations

Answer 48

a business operated by multiple parties that are legally entitled to operate as a single entity for the purpose of doing business; usually run by a board of directors

Question 49

Disequilibrium (of a market)

Answer 49

when either the quantity supplied or the quantity desired exceeds the other

Question 50

Means of production

Answer 50

Term definition. The non-human resources used to produce goods in an economy Example: tools

Question 51

Human Resources

Answer 51

The individual people who make up the labor force of an organization

Question 52

Exporting

Answer 52

selling to other countries Example: US farms exports soybeans to Europe

Question 53

Smoot-Hawley Tariff Act

Answer 53

Tariffs passed in 1930 on over 20,000 imported goods with the intention of protecting American jobs, but resulted in decreased international trade

Question 54

Microeconomics

Answer 54

The study of individuals and their decisions

Question 55

Capitalism

Answer 55

An economic system characterized by private, rather than government, ownership of industry. Prices, production, and distribution of goods are determined by competition in a free market. Example: United States

Question 56

Trade Barrier

Answer 56

obstacles to trade Example: Government regulations

Question 57

Free Trade

Answer 57

the ability for one country to trade with another without hindrance so that all goods can be produced with the greatest efficiency Example: Removing tariffs on imports and exports creates a free trade scenario

Question 58

Invisible Hand

Answer 58

the theory that the economy is not led by an entity, but is the result of individuals acting in their own self-interests

Question 59

Fiscal policy

Answer 59

The use of revenue collection (taxes) and expenditure to influence the economy

Question 60

Natural Resources

Answer 60

Assets used in the production of a good which are found in the natural environment

Question 61

Keynesian Economics

Answer 61

free markets can lead to economic inefficiencies and governmental intervention can lead to a stable, productive economy Example: Governments can stimulate the economy by reducing interest rates and investing in infrastructure.

Question 62

Command Economy

Answer 62

government controls the economy, determining what should be produced and how much should be produced. This type of economy is most closely associated with communism.

Question 63

Monopolistic Competition

Answer 63

A market where many firms are present and the distinction of the products results in increased prices that drives innovation Example: The market of video games - each video game is distinct, but can be used as a substitute for another

Question 64

Monetary Policy

Answer 64

Laws and regulations affecting the value and cost of money

Question 65

Purchasing Power

Answer 65

The ability to buy goods

Question 66

Globalization

Answer 66

when countries and people become more connected and share things like goods, ideas, and cultures worldwide, often because of technology and improved communication

Question 67

Trade

Answer 67

the exchange of products for money between entities

Question 68

Importing

Answer 68

buying from other countries Example: The US imports cars from Japan

Question 70

Economies of Scale

Answer 70

a reduction in the price of per-unit production resulting from producing more at once Example: Buying raw materials in bulk at a discount, thereby decreasing the per-unit cost

Question 71

Surplus

Answer 71

when the quantity supplied is greater than the quantity desired

Question 72

Interdependence of economies

Answer 72

all economies require each other to function Example: The technology of a smartphone may be produced in a different country than the physical parts.

Question 73

Partnerships

Answer 73

a business run by at least two people, who may then employ others to assist in the operation of the business