Unit 1 Test Flashcards
Who makes all of the economic decisions in a command economy?
The Government
What term is referred to when you have a substantial increase in the general level of prices related to an increase in the volume of money, which results in the loss of value of currency?
Inflation
In what type of economy would you find a free market economy with limited government involvement?
Mixed economy
What measures the dollar value of all final goods and services, and structures produced within a country’s borders in a 12 month period?
Gross Domestic Product (GDP)
What kind of rights allow citizens the opportunity to make their own decisions on their property?
Private property rights
What is it called when two corporations that produce the same kind of product merge?
Horizontal merger
A risk taker in search of profits is known as…
An entrepreneur
What is the name of the model used to illustrate the concept of opportunity cost?
Production possibilities frontier
What are the four factors of production?
Labor, land, capital, entrepreneurs
What type of merger takes place when corporations involved in different steps of manufacturing or marketing merge together?
Vertical merger
What is the fundamental problem of economics?
Scarcity
Who plays the role of protector, consumer, regulator, and promoter of economic goals in the US?
The government
What is the most common form of business organization in the US?
Sole proprietorship
What is the main strength of the corporate form of business organization?
Ease of raising financial capital
What is a major reason for conglomerate mergers?
diversification
