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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
What type of fund is not afforded protection by the government?
Mutual funds
26
What are eurodollars?
Dollar-denominated demand deposits held in banks outside the US (not just Europe)
27
What is the simple definition of economics?
The production, allocation, and use of goods and services.
28
What are the 3 basic questions economics focuses on?
1. What to produce? 2. For whom to produce? 3. How to produce?
29
What is GNP?
Gross National Product (Goods and Services)
30
What is a market form where market\industry is dominated by a small number of sellers?
Oligopoly
31
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?
Monopoly
32
What is monopolistic competition?
describes a common market structure in which firms have many competitors, but each one sells a slightly different product. Example: Film industry
33
_______ holds that nation-states are the basic governmental unit and there is no authority above individual nations.
Realism
34
_____________ is an element of federal monetary policy; this rate affects the cost of money to banks and the cost to borrow by consumers.
Discount rate
35
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 ___________?
New York
36
___________ is the interest rate a Federal Reserve Bank charges eligible financial institutions to borrow funds on a short-term basis.
Discount Rate
37
A higher discount rate usually indicates that the monetary policy is more __________.
restrictive
38
Who sets the discount rate for the Federal Reserve?
Board of directors of the Federal Reserve Banks
39
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?
Depository Institutions
40
What institution deals with issues that affect the economic life of every American? A. Federal Reserve B. Federal Trade Commission C. Depository Institutions
Federal Trade Commission
41
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
Federal Trade Commission
42
What is the term given to the percentage of the principal that is paid as fee?
Interest Rate
43
The amount lent is called the _____________.
Principal
44
___________ is a fee paid on borrowed money.
Interest
45
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. Office of Management and Budget
46
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
B. The Department of Commerce
47
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
C. The Department of Treasury
48
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
D. Federal Reserve Board
49
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.
Mutual fund
50
used to describe how the self-interested behavior of people in a marketplace leads to the greater good for all.
Invisible hand
51
In regards to establishing the federal budget, what is it called when Congress reviews the main points of the budget?
Initial formation
52
In regards to establishing the federal budget, what is it called when the president signs or vetoes the budget?
Final approval
53
In regards to establishing the federal budget, what is it called when Congress reviews, modifies, and approves the budget?
Conressional action
54
What is the major source of income for the national govt?
Import\exports
55
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
Frictional unemployment
56
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
Structural unemployment
57
What type of unemployment is when unemployment caused by changes in seasons? A. Full unemployment B. Frictional unemployment C. Seasonal unemployment D. Structural unemployment
Seasonal unemployment
58
What would happen to inflation if we were to enter a period of recession? Would it rise or fall?
Fall because with people w/ less money, there is less demand, and thus businesses would begin to lower cost thus lowering inflation.
59
_____________is the fair and just economic policies promoted by our government. A. Economic security B. Economic equity C. Economic freedom D. Economic competition
Economic equity
60
_______ is protection against risks beyond our control in economics. A. Economic security B. Economic equity C. Economic freedom D. Economic competition
Economic security
61
________________ 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
Economic freedom
62
_____________- 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
Economic competition
63
In order for something to have value in economics, it needs to be two things--what are they?
Scarce and have utiliy
64
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
Command economy
65
A ___________ economy is an economic system in which supply, demand, and the price system help people make decisions and allocate resources.
Market economy
66
A ____ economy is when allocation of scarce resources and other economic activity is result`` of ritual, habit, or custom.
Traditional
67
The Law of _______ is rule stating that more will be offered for sale at high prices than at lower prices.
Supply
68
The Law of Supply is a rule that states that the quantity supplied varies indirectly or directly with its price?
Directly
69
A country has an ________advantage when it can produce a product more efficiently (greater output per unit of input) than another country.
absolute
70
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.
comparative
71
Mechanization is combined labor of __________ and _______.
people and machines
72
__________ is a production process in which machines do the work and people oversee them.
automation
73
______ is sophisticated, computer-controlled machinery that operates an assembly line.
Robotics
74
______ workers are people whose job require no specialized training.
Unskilled
75
______ workers are people whose jobs require some training.
Semiskilled
76
________ workers are people who have learned a trade or craft either through a vocational school or as an apprentice to an experienced worker.
Skilled
77
__________ are highly educated individuals with college degrees and usually additional edu or training.
Professionals
78
________ demand is a situation in which a product's price change has little impact on the quantity demanded by consumers.
Inelastic
79
__________this measures how the quantity demanded changes with price.
Elasticity of Demand
80
_________ competition is a market situation in which there are numerous buyers and sellers and no single buyer or seller can affect price.
Perfect

Economics (10 decks)

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