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Business > Exam #1 > Flashcards

Exam #1 Flashcards

1
Q

What year was the FED established?

A

1913

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2
Q

Who is the current chairman of the FED?

A

Janet Yellen

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3
Q

How many Board of Governors members are there?

A

7

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4
Q

How many years is a Board of Governors term in office?

A

14

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5
Q

Board of Governors are appointed by who?

A

President

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6
Q

Board of Governors appointments are confirmed by who?

A

Senate

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7
Q

How many Federal Reserve Districts are there?

A

12

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8
Q

How many Federal Reserve Banks & Branches are there?

A

37

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9
Q

What year was the IRS established?

A

1913

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10
Q

In what city is the main office complex of the FED located?

A

Washington, DC

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11
Q

Name the four types of U.S. Government Securities.

A
  1. Treasury Bonds
  2. Treasury Bills
  3. Treasury Notes
  4. U.S. Savings Bonds
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12
Q

The combined balance of all U.S. Government Securities is called the?

A

National Debt

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13
Q

Name 4 attributes of U.S. Gov’t Securities which make them attractive to investors.

A
  1. Safe
  2. Secure
  3. Stable
  4. Always a Market
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14
Q

What is the four part mission of the FED?

A
  1. Min. Inflation
  2. Min. Recession
  3. Min. Unemployment
  4. Encourage Stable Economic Growth
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15
Q

Name four regular purchasers of U.S. Government Securities.

A
  1. Universities
  2. Individuals
  3. Insurance Companies
  4. Foreign Companies
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16
Q

The FED attempts to accomplish its Mission thru Monetary Policy which is the management of what?

A

Money Supply

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17
Q

What are the three steps of managing money supply?

A
  1. More $ > More Spending > Inflationary
  2. Less $ > Less Spending > Recessionary
  3. Objective is Balance
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18
Q

Name the three tools that the FED uses.

A
  1. Set Reserve Requirements
  2. Set Discount Rate & Set Fed Funds Rate
  3. Open Market Operations
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19
Q

Name and describe one of the tools of the FED.

A

Open Market Operations - Buying and Selling of U.S. Government Securities.

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20
Q

What is Fiscal Policy?

A

Gov’t Taxation and Spending

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21
Q

Who carries out Fiscal Policy?

A
  1. Federal Gov’t
  2. State Govt’
  3. Local Gov’t
  4. Public Schools
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22
Q

What is a “Call Report”?

A

A report created by Banks & Credit Unions of loan and deposit information every 6 weeks which is sent to their district branch.

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23
Q

What are “Compiled Call Reports”?

A

A call report is a compiled report from each district and then sent to Washington.

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24
Q

What is the “Beige Book”?

A

Compilation of all 12 District Complied Call Reports into one final report. Used by the Board of Governors for Monetary Policy.

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25
Q

The study of how individuals and society choose to use scarce resources to produce goods and services and distribute then for consumption.

A

Economics

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26
Q

Refers to what you give up (your next best choice) in order to do or get something else (your chosen decision).

A

Opportunity Cost

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27
Q

A shortage of resources created by a limitation of quality or cost.

A

Scarcity

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28
Q

Land, labor, capital, entrepreneurship, knowledge, time.

A

Resources

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29
Q

The study of the operation of a nations economy as a whole. Monetary Policy, Fiscal Policy, Unemployment, Interest Rates, inflation.

A

Macroeconomics

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30
Q

Individual household and individual business decision making and behavior.

A

Microeconomics

31
Q

The quantity of products that producers are willing to sell at different prices at a specific time.

A

Supply

32
Q

As the price goes up, the quantity that producers are willing to produce also goes up. This is a direct relationship.

A

Law of Supply.

33
Q

The quantity of products that consumers are willing and able to buy at different prices at a specific time.

A

Demand

34
Q

As the price goes up, the quantity that consumers are willing to buy goes down. This is an inverse relationship.

A

Law of Demand

35
Q

The point in which the amount of goods sought by buyers is equal to the amount of goods produced by suppliers.

A

Equilibrium Point

36
Q

A common, recurring pattern in which there is a period of rapid economic growth (recovery and prosperity) when supply and demand stimulate each other; alternating with a period of decline (contraction and recession) with diminishing demand and supply.

A

Business Cycle

37
Q

An economic system in which all or most of the factors of production and distribution are privately owned and operated for profit. This is a Free Market Economy.

A

Capitalism

38
Q

A system in which decisions about what to produce an in what quantities are made by the Market.

A

Free Market

39
Q

A market condition in which a large number of businesses produce products that are very similar but are perceived by buyers as different.

A

Monopolistic Competition

40
Q

An attempt to make buyers think similar products are different in some way.

A

Product Differentiation

41
Q

A form of competition in which just a few businesses dominate a market.

A

Oligopoly

42
Q

A form of competition in which only one business controls the total supply of a product and its price.

A

Monopoly

43
Q

The removal of government control and strict oversight in the market that thereby opens the market for others to enter.

A

Deregulation

44
Q

An economic and political system system in which the state makes almost all of the economic decisions and owns almost all the major factors of production including housing for its people. This is a command economy.

A

Communism

45
Q

An economic system based on the premise that some, if not most, basic businesses should be owned by the government so profits can be evenly distributed among the people.

A

Socialism

46
Q

The money the federal government spends over and above its revenue for a specific time period of time.

A

National Deficit

47
Q

The sum total of government deficits over time.

A

National Debt.

48
Q

The total value of all final goods and services produced in a country in a given year.

A

Gross Domestic Product

49
Q

A period during which the GDP of a nation declines for two or more consecutive quarters.

A

Recession

50
Q

A severe recession (more than two consecutive quarters of decline).

A

Depression

51
Q

A general rise in the price of goods and services over time.

A

Inflation

52
Q

The number of civilians 16 years of age and older who are unemployed and have tried to find a job within the prior four weeks.

A

Unemployment Rate

53
Q

A set of monthly statistics that measures the pace of inflation or deflation. A “market basket” of the prices of over 200 categories of goods and services.

A

Consumer Price Index

54
Q

A set of monthly statistics that measures prices at the wholesale level.

A

Producer Price Index

55
Q

Who is Adam Smith?

A

Father of Modern Economic thought.

56
Q

What book did Adam Smith write?

A

Wealth of Nations

57
Q

When was the “Wealth of Nations” published?

A

1776

58
Q

What is the two part significance of “The Wealth of Nations”?

A
  1. Still applicable today.

2. Influence the founders of our country.

59
Q

What is Adam Smith’s Economic Man Model?

A

Common people make daily decisions on how they spend their money. Those decisions decide the success/failure of a business.

60
Q

Name three elements of the Demand Side Economics.

A
  1. Democratic
  2. Like Taxes
  3. For Gov’t Assistance Programs
61
Q

Which economist is a major proponent of the Demand Side Economics?

A

John Maynard Keynes

62
Q

Name three elements of the Supply Side Economics.

A
  1. Republican
  2. Favor Tax cuts
  3. Don’t Favor Assistance Programs
63
Q

Which economist is a major proponent of the Supply Side Economics?

A

Adam Smith

64
Q

What is Capital Structure Theory?

A

How companies acquire money.

65
Q

Include the four ways they can acquire funds.

A
  1. Retained Earnings
  2. Loans
  3. Sell Stock
  4. Sell Bonds
66
Q

Example of Capital Structure Theory.

A

Menards uses retained earnings and sell bonds, they do not use loans.

67
Q

Name and give examples of the four factors of production.

A
  1. Natural Resources - Raw Materials
  2. Capital - Where money is acquired from.
  3. Human Resources - Employees
  4. Entrpreneurship - Inventors
68
Q

Name and describe each of the five steps of the Affirmative Action Plan.

A
  1. Create an Employee audit.
  2. Gather area Labor Statistics.
  3. Create an implementation plan.
  4. Implement your plan.
  5. Conduct Evaluations and make changes as needed.
69
Q

What is the stated objective of the affirmative action plan?

A

To deal with the present effects of past prejudices.

70
Q

What are two reasons why nations involve themselves in international trade?

A
  1. More Resources

2. More Oppertunities

71
Q

Explain Lawrence Kohlberg’s Theory of the development of personal ethics PRE-CONVENTIONAL PHASE.

A

Authority figures like police, parents, having a major influence on ethical decisions, adolescent phase.

72
Q

Explain Lawrence Kohlberg’s Theory of the development of personal ethics CONVENTIONAL PHASE.

A

Peer groups start to take on a level of influence - teen to adulthood.

73
Q

Explain Lawrence Kohlberg’s Theory of the development of personal ethics POST-CONVENTIONAL PHASE.

A

Educational factors determains decisions - adults

Business (10 decks)

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