Exam Vocab

Question 1

Capitalism

Answer 1

People make their own decisions about saving resources in the use of goods and services

Question 2

Quantity

Answer 2

How much

Question 3

Free enterprise

Answer 3

Individuals can undertake government activities with little or no government control

Question 4

Command economy

Answer 4

Run by the government and makes most of the decisions

Question 5

Factors of production

Answer 5

Resources for producing goods and services to satisfy people’s wants

Question 6

Profit

Answer 6

Difference between what it costs and what that buyer pays

Question 7

Mixed economy

Answer 7

An economy of three basic systems

Question 8

Opportunity cost

Answer 8

When scarce resources are used for one purpose than another

Question 9

Interest

Answer 9

The payment for the use of capital

Question 10

Demand

Answer 10

The amount of a product that buyers are willing and able to buy at a different price

Question 11

Labor unions

Answer 11

Workers formed to protect members rights

Question 12

Collective bargaining

Answer 12

Representatives of unions and businesses trying to reach agreement about wages and working conditions

Question 13

Fringe benefits

Answer 13

Indirect payments of their work

Question 14

Liquidity

Answer 14

Turn savings back into cash

Question 15

Dividends

Answer 15

Payments from the profits of companies in which they own stock

Question 16

Variable expenses

Answer 16

Expenses that change from month to month

Question 17

Disposable income

Answer 17

Amount of money left after taxes have been paid

Question 18

Fixed expenses

Answer 18

Expenses that are paid regularly

Question 19

Fiscal policy

Answer 19

Decisions about the amount of money it spends and collects in taxes

Question 20

Monopoly

Answer 20

Single business with power to control price in a market

Question 21

Monetary policy

Answer 21

Regulation of money supply by the federal reserve system

Question 22

Trust

Answer 22

Companies that benefit from high prices they all agree to change

Question 23

Federal budget

Answer 23

Governments plan oh how it will raise and spend money

Question 24

Money supply

Answer 24

Total amount of money available for use as a medium of exchange

Question 25

Recession

Answer 25

A slowdown in economic activity and production