Module 1 Flashcards
refers to the study of how individuals, businesses, governments, and societies allocate and manage resources to satisfy human wants and needs
Economics
Also known as factors of production, are the resources used to produced goods and services
Economic Resources
Refers to the limitation of resources
Scarcity
refers to products or services which are not available in the required quantity
Shortage
is a social science which analyzes the production, consumption and distribution of goods and services.
Economics
Understanding the economy as a system
Microeconomics
Examines the economy as a whole.
Macroeconomics
Analyzes the flow:of goods between nations
International Economics
Economic theorvts the field in which the models are derived and applied to cument problems.
Theories
This is concerned with international banking, monetary exchange rates, tariffs and the effects of different economic and governmental systems.
International Economics
The goal of economists in developing theories is that they require less information and lead to more accurate results
Theory
Economic history is the field which focuses on economic theories and writings of the past
History
Many decisions of today are made based on the theories and ideas of former economists and scholars
History
is concerned with describing and explaining economic phenomena as they are, without making value judgments or expressing opinions.
Positive Economics
It involves making value judgments and recommendations about what ought to be done expressing opinions about desirable economic policies.
Normative Economics
Focuses on values and preferences
Normative Economics
Focuses on facts
Positive Economics
Study of the relationship of Positive and
Normative Economics.
Applied Economics
refers to the way in which the decisions about producing goods and services are made within a given society and the rules that govern distribution of those. Who decides what to produce and how? Who owns the resources? How are the produced goods to be allocated to their end users?
Economic System
consumers’ behavior drives the production
Market Economy
The government does not intervene in the running of the economy beyond setting up the basic, large-scale, stable framework for the market to operate in
Market Economy
The decisions of the government drive the production
Command Economy
A mix of both market economy and command economy.
Mixed Economy
Because of economic evolution, most economies adapted to a _______________ for balance
Mixed Economy
Market Economy (A)
Efficiency
Efficient in resources allocation
Market Economy (A)
Innovation
Innovative in improving products and services
Market Economy (A)
Individual Freedom
Freedom of individual to choice what to sell and what to buy
Market Economy (B)
Inequality
Inequality to the resources since wealth can have more than the others
Market Economy (D)
Market Failure
It is caused by not always allocating resources efficiently.
Market Economy (D)
Cyclical Instability
It is a cycle of an economy that can have a negative and positive things that happen
Command Economy (A)
Innovation
Innovative ways to improve a product and services
Command Economy (A)
Social Service
Government always put society first so they prioritize social services.
Command Economy (A)
Stability
A central decision can stabilize the economy
Command Economic (D)
Limited Choice
Government is the one who will decide about the production and the pieces that needs to be sell.
Command Economy (D)
Bureaucratic Inefficiency
Centralized decision will slow down to a problem in the economy
Mixed Economy (A)
Social Safety Net
It ensures a basic standard of living
Mixed Economy (A)
Regulations
Protect consumers, workers, and others
Mixed Economy (A)
Balance Approach
Combining market forces
Mixed Economy (D)
Political Influence
May lead to inconsistent policies
Mixed Economy (D)
Potential for Inefficiency
Downside of market and command economy
Mixed Economy (D)
Complexity
Combination can lead to complex system
Market Economy (A)
Innovation
Efficiency
Individual Freedom
Market Economy (D)
Inequality
Market Failure
Cyclical Instability
Command Economy (A)
Stability
Social Service
Innovation
Command Economy (D)
Lack of Incentives
Limited Choices
Bureaucratic Inefficiency
Mixed Economy (A)
Balanced Approach
Social Safety Nets
Regulations
Mixed Economy (D)
Complexity
Political Influence
Potential for Inefficiency
is typically accompanied by higher prices, so consumers may be less willing to buy non essential or luxury items
If wages do not rise at the same rate of _________, people lose money
Inflation
The more people who are out
of work, the less money that is circulated into the economy through the purchase of goods and services. Even the threat of __________ has an impact, as workers who fear losing their jobs are less inclined to spend or invest their money.
Unemployment
is the value of its currency in the international market. In the United States, when the value of the S is high in relation to other countries currencies, the more goods and services we are able to import. In contrast, a higher value of the $ means that other nations may be less inclined to import products from the United States.
Foreign Exchange Rate
The higher the demand for goods and services, the greater the need for
workers to produce them, leading to economic growth
Supply and Demand
People who have adjustable-rate home mortgages can face financial hardship or even lose their homes when __________ spike. Retirees who live largely off investment income may need to lower their standard of living when interest rates decline
Interest Rate
