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Economics > Terms > Flashcards

Terms Flashcards

0
Q

Smith believed what was the dominant motivating force in market economy?

A

Self-interest

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1
Q

What is “the wealth of Nations” and when was it published?

A

Analysis of market economy. Written by Adam Smith in 1776.

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2
Q

What is the “invisible hand”?

A

Belief that market participants were guided by this invisible hand to act in ways promoted by public interest.

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3
Q

What are the four general viewpoints regarding the workings of markets?

A

Classical

Keynesian

Monetary

Neoclassical

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4
Q

The most contemporary definitions of economics involve that choice and ______ and the relationship to one another.

A

scarcity

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6
Q

What is the study of the individual parts that make up the economy such as household business firms and government agencies?

A

micro economics

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6
Q

Economists believe that individuals act which way?

A

Rationally; it means that given a person’s goal and knowledge people take actions likely to achieve those goals and avoid actions likely to detract from those goals

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7
Q

The human wants and needs exceed the ability of the economy to satisfy those wants and needs. Never enough to go around. What is this term called?

A

scarcity

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9
Q

___________ assumes that people make choices by weighing the costs and benefits of particular actions.

A

marginal analysis

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10
Q

What are business cycles?

A

The alternating periods of prosperity and recession that seem to characterize all market-oriented economies.

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11
Q

What are the 4 phases of the business cycle?

A
  1. Peak: High point of business activity (occurs at specific time)
  2. Contraction: Period of declining business activity (occurs of period of time)
  3. Trough: Low point in business activity (specific)
  4. Expansion: Growing business activity (occurs of perio of time)
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12
Q

What is the contraction of a business activity?

A

Period of declining business activity (occurs of period of time)

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13
Q

What is the trough of a business activity?

A

Low point in business activity (specific)

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14
Q

What are secular trends?

A

Long run direction of movement of a variable.

Ex: Our economy was once dramatically growing richer over an entire century, that would be considered a “secular” trend in real GNP.

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15
Q

Barter requires a “double coincidence of wants.” What does that mean?

A

Each party must want what the other party has.

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16
Q

Why does the “double coincidence of wants” not apply with money?

A

CAUSE EERYONE ALWAYS WANTS MONEEEYYYY

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17
Q

Money is the most _______ of all assets.

A

liquid

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18
Q

What does liquidity refer to?

A

Ease with which an asset can be transformed into spendable form.

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19
Q

What is a disadvantage of holding wealth in money form?

A

Money typically pays a lower return than other assets.

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20
Q

Consists of currency, demand deposits, other checkable deposits, and traveler’s checks.

A

M1

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21
Q

Checking accounts held in commercial banks.

A

Demand Deposits

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22
Q

Does M1 orM2 include overnight repurchase agreements (repos) and Eurodollars?

A

M2

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23
Q

What is a certificate issued by a bank to a person depositing money for a specified length of time?

A

Certificate of Deposits (CDs)

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24
Q

Who are mutual funds managed by?

A

Private financial companies

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25
Q

What type of fund is not afforded protection by the government?

A

Mutual funds

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26
Q

What are eurodollars?

A

Dollar-denominated demand deposits held in banks outside the US (not just Europe)

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27
Q

What is the simple definition of economics?

A

The production, allocation, and use of goods and services.

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28
Q

What are the 3 basic questions economics focuses on?

A
  1. What to produce?
  2. For whom to produce?
  3. How to produce?
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29
Q

What is GNP?

A

Gross National Product (Goods and Services)

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30
Q

What is a market form where market\industry is dominated by a small number of sellers?

A

Oligopoly

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31
Q

A company or group having exclusive control over a commodity or service.

E.g. If Starbucks owned all Coffee Shops (no DD, no Donkey, Wawa, etc.)

What is this an example of?

A

Monopoly

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32
Q

What is monopolistic competition?

A

describes a common market structure in which firms have many competitors, but each one sells a slightly different product.

Example: Film industry

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33
Q

_______ holds that nation-states are the basic governmental unit and there is no authority above individual nations.

A

Realism

34
Q

_____________ is an element of federal monetary policy; this rate affects the cost of money to banks and the cost to borrow by consumers.

A

Discount rate

35
Q

The Federal Open Market Committee sets the Federal Reserve’s monetary policy, which is carried out to the trading desk of the Federal Reserve Bank of ___________?

A

New York

36
Q

___________ is the interest rate a Federal Reserve Bank charges eligible financial institutions to borrow funds on a short-term basis.

A

Discount Rate

37
Q

A higher discount rate usually indicates that the monetary policy is more __________.

A

restrictive

38
Q

Who sets the discount rate for the Federal Reserve?

A

Board of directors of the Federal Reserve Banks

39
Q

What institution uses their reserve accounts at Federal Reserve Banks to not only satisfy reserve requirements, but also in order to process financial transactions through the Federal Reserve, such as check and electronic payments?

A

Depository Institutions

40
Q

What institution deals with issues that affect the economic life of every American?

A. Federal Reserve
B. Federal Trade Commission
C. Depository Institutions

A

Federal Trade Commission

41
Q

Since this institution deals with issues that affect the economic life of every American, it also has both consumer protection and competition jurisdiction in broad sectors of the economy. What institution is this?

A. Federal Trade Commission
B. Federal Reserve
C. Federal Consumer Protection Committee

A

Federal Trade Commission

42
Q

What is the term given to the percentage of the principal that is paid as fee?

A

Interest Rate

43
Q

The amount lent is called the _____________.

A

Principal

44
Q

___________ is a fee paid on borrowed money.

A

Interest

45
Q

Who has the chief responsibility for assembling and analyzing figures in the presidential budget that is submitted to Congress each year?

A. Office of Management and Budget
B. The Department of Commerce
C. The Department of Treasury
D. Federal Reserve Board

A

A. Office of Management and Budget

46
Q

What was created in 1903 to protect interests of business people at home and abroad?

A. Office of Management and Budget
B. The Department of Commerce
C. The Department of Treasury
D. Federal Reserve Board

A

B. The Department of Commerce

47
Q

Which of these collect taxes through the Internal Revenue Service (IRS)?

A. Office of Management and Budget
B. The Department of Commerce
C. The Department of Treasury
D. Federal Reserve Board

A

C. The Department of Treasury

48
Q

Which of these is responsible for implementing the monetary policy?

A. Office of Management and Budget
B. The Department of Commerce
C. The Department of Treasury
D. Federal Reserve Board

A

D. Federal Reserve Board

49
Q

nothing more than a collection of stocks and/or bonds. It’s as if a company that brings together a group of people and invests their money in stocks, bonds, and other securities.

A

Mutual fund

50
Q

used to describe how the self-interested behavior of people in a marketplace leads to the greater good for all.

A

Invisible hand

51
Q

In regards to establishing the federal budget, what is it called when Congress reviews the main points of the budget?

A

Initial formation

52
Q

In regards to establishing the federal budget, what is it called when the president signs or vetoes the budget?

A

Final approval

53
Q

In regards to establishing the federal budget, what is it called when Congress reviews, modifies, and approves the budget?

A

Conressional action

54
Q

What is the major source of income for the national govt?

A

Import\exports

55
Q

What type of unemployment is when someone is between jobs because of firings, layoffs, voluntary searches for new jobs, or retraining?

A. Full unemployment
B. Frictional unemployment
C. Seasonal unemployment
D. Structural unemployment

A

Frictional unemployment

56
Q

What type of unemployment is it when unemployment is caused by changes in the economy e.g. technological advances or discoveries of natural resources

A. Full unemployment
B. Frictional unemployment
C. Seasonal unemployment
D. Structural unemployment

A

Structural unemployment

57
Q

What type of unemployment is when unemployment caused by changes in seasons?

A. Full unemployment
B. Frictional unemployment
C. Seasonal unemployment
D. Structural unemployment

A

Seasonal unemployment

58
Q

What would happen to inflation if we were to enter a period of recession? Would it rise or fall?

A

Fall because with people w/ less money, there is less demand, and thus businesses would begin to lower cost thus lowering inflation.

59
Q

_____________is the fair and just economic policies promoted by our government.

A. Economic security
B. Economic equity
C. Economic freedom
D. Economic competition

A

Economic equity

60
Q

_______ is protection against risks beyond our control in economics.

A. Economic security
B. Economic equity
C. Economic freedom
D. Economic competition

A

Economic security

61
Q

________________ is allowing citizens to make their own choices such as moving to a different location to take on a job.

A. Economic security
B. Economic equity
C. Economic freedom
D. Economic competition

A

Economic freedom

62
Q

_____________- is the rivalry among sellers trying to achieve such goals as increasing profits, market share, and sales volume by varying the elements of the marketing mix: price, product, distribution, and promotion.

A. Economic security
B. Economic equity
C. Economic freedom
D. Economic competition

A

Economic competition

63
Q

In order for something to have value in economics, it needs to be two things–what are they?

A

Scarce and have utiliy

64
Q

A _______ economy is an economic system characterized by a central authority that makes most of the major economic decisions.

A. Market Economy
B. Command Economy
C. Traditional Economy

A

Command economy

65
Q

A ___________ economy is an economic system in which supply, demand, and the price system help people make decisions and allocate resources.

A

Market economy

66
Q

A ____ economy is when allocation of scarce resources and other economic activity is result`` of ritual, habit, or custom.

A

Traditional

67
Q

The Law of _______ is rule stating that more will be offered for sale at high prices than at lower prices.

A

Supply

68
Q

The Law of Supply is a rule that states that the quantity supplied varies indirectly or directly with its price?

A

Directly

69
Q

A country has an ________advantage when it can produce a product more efficiently (greater output per unit of input) than another country.

A

absolute

70
Q

A country has a __________ advantage in producing a good if it has a lower opportunity cost of producing the good compared to whatever else it could do with its resources.

A

comparative

71
Q

Mechanization is combined labor of __________ and _______.

A

people and machines

72
Q

__________ is a production process in which machines do the work and people oversee them.

A

automation

73
Q

______ is sophisticated, computer-controlled machinery that operates an assembly line.

A

Robotics

74
Q

______ workers are people whose job require no specialized training.

A

Unskilled

75
Q

______ workers are people whose jobs require some training.

A

Semiskilled

76
Q

________ workers are people who have learned a trade or craft either through a vocational school or as an apprentice to an experienced worker.

A

Skilled

77
Q

__________ are highly educated individuals with college degrees and usually additional edu or training.

A

Professionals

78
Q

________ demand is a situation in which a product’s price change has little impact on the quantity demanded by consumers.

A

Inelastic

79
Q

__________this measures how the quantity demanded changes with price.

A

Elasticity of Demand

80
Q

_________ competition is a market situation in which there are numerous buyers and sellers and no single buyer or seller can affect price.

A

Perfect

Economics (10 decks)

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