Unit 2

Question 1

Economic Systems

Answer 1

the way a nation uses its limited resources to fill its unlimited wants and needs

Question 2

Basic economic questions

Answer 2

1. What goods/services should be produced?
2. What quantities of goods/services to produce
3. How should goods/services be produced?
4. For whom should the goods/services be produced?

Question 3

Factors of Production/Economic Resources

Answer 3

1. Natural Resources
2. Human Resources
3. Capital Resources

Question 4

Natural Resources

Answer 4

things provided by nature

Question 5

Human Resources

Answer 5

people that do work (labor)

Question 6

Capital Resources

Answer 6

money, machines, equipment

Question 7

Scarcity

Answer 7

a limited amount of something

Question 8

The economic problem

Answer 8

Limited resources to meet unlimited wants and needs

Question 9

Need

Answer 9

Thing necessary for survival

Question 10

Want

Answer 10

Things not necessary for survival but make life better

Question 11

Elements of an economy

Answer 11

Consumers
Business
Government
The circular flow of money

Question 12

The circular flow of money

Answer 12

How money moves through an economy, from consumers to business to government

Question 13

World economic systems

Answer 13

Traditional economy
Planned government
Market economy
Mixed economy

Question 14

Traditional economy

Answer 14

Things are done the way they’ve always been done

Question 15

Planned government

Answer 15

The government controls all resources and answer all economic questions

Question 16

Market economy

Answer 16

All economic decisions are made by the market place by consumers

Question 17

Mixed economy

Answer 17

A combination of all economic systems where consumers make economic decisions

Question 18

Economic systems elements

Answer 18

Basic economic questions 
Factors if production/economic resources
Scarcity
The economic problem 
Needs vs wants
Elements of an economy
World economic systems

Question 19

Business cycles

Answer 19

The general growth pattern of expansion and contraction that economies go through

Question 20

Prosperity

Answer 20

The economy is experiencing high production and high spending

Question 21

Recession

Answer 21

A slowdown in production that causes a decrease in spending

Question 22

Depression

Answer 22

An extended period of time with low production and low spending and high unemployment

Question 23

Recovery

Answer 23

Spending and production begin to increase and jobs are being created

Question 24

Business cycles words

Answer 24

Prosperity
Recession
Depression
Recovery

Question 25

Characteristics of private enterprise (mixed)

Answer 25

Freedom of ownership Freedom of profit Freedom of competition

Question 26

Freedom of ownership

Answer 26

Individuals have the right to own and operate their own businesses

Question 27

Freedom of profit

Answer 27

Individuals can earn and determine the use of the money they make

Question 28

Freedom of competition

Answer 28

Individuals have the right to open and operate business offering a product similar to other businesses

Question 29

Factors affecting profits,revenues, and expenses

Answer 29

Affecting profits Affecting revenue Affecting expenses

Question 30

Affecting profits

Answer 30

Prices Expenses Competition productivity - how efficiently work is done

Question 31

Affecting revenues (sales)

Answer 31

Marketing-promotion and advertising Competition Product,service-quality Operations

Question 32

Affecting expenses

Answer 32

Cost of materials and utilities Efficient use of resources Quality of good/ service Human resources (productivity)

Question 33

Causes if economic decisions

Answer 33

``` Price Quality Customer service Warranties Need or want Persons economic position The economy Nature Competition ```

Question 34

Domestic vs world trade

Answer 34

Domestic production World trade Free trade

Question 35

Domestic production

Answer 35

Products are produced within boundaries of a country

Question 36

World trade

Answer 36

Trading across borders to obtain products or services countries don't produce with resources they possess

Question 37

Free trade

Answer 37

Allows traders to interact without barriers imposed by the government

Question 38

Benefits of free trade

Answer 38

Reduces prices | Increases variety of goods/services available

Question 39

imports vs exports and the us economy

Answer 39

Imports Exports Balance of trade

Question 40

Imports

Answer 40

Products/services brought in from other countries

Question 41

Exports

Answer 41

Products/services sold to other countries

Question 42

Balance of trade

Answer 42

Dollar amount of what a country imports is equal to the amount it exports

Question 43

Trade deficit

Answer 43

Imports>exports

Question 44

Trade surplus

Answer 44

Imports

Question 45

Balance of trade situations

Answer 45

Trade deficit | Trade surplus