Unit Four

Question 1

Fiscal

Answer 1

something that relates to government money or public money

Question 2

Capitalism

Answer 2

an economic and political system in which a country’s trade and industry are controlled by private owners for profit

Question 3

Macroeconomics

Answer 3

the part of economics concerned with large-scale or general economic factors, such as interest rates and national productivity.

Question 4

Microeconomics

Answer 4

the part of economics concerned with single factors and the effects of individual decisions

Question 5

Quota

Answer 5

financial criteria such as gross margin or contribution to overhead

Question 6

Interest

Answer 6

The price paid for borrowing money. It is expressed as a percentage rate over a period of time

Question 7

Capital

Answer 7

cash or liquid assets being held or obtained for expenditures

Question 8

Liquid Asset

Answer 8

cash on hand, cash on bank deposit, and assets that can be quickly and easily converted to cash.

Question 9

Fixed Asset

Answer 9

a tangible piece of property, plant, or equipment (PP&E) that you own or manage with expectations that it’ll continuously help generate income

Question 10

Yield

Answer 10

how much income an investment generates, separate from the principal.

Question 11

Taxes

Answer 11

mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities.

Question 12

Investment

Answer 12

the action or process of investing money for profit or material result.

Question 13

Budget

Answer 13

an estimate of income and expenditure for a set period of time.

Question 14

Debt

Answer 14

something, typically money, that is owed or due

Question 15

Loan

Answer 15

a thing that is borrowed, especially a sum of money that is expected to be paid back with interest

Question 16

Economic: Rising inflation rates have significant implications for both macroeconomics and microeconomics, affecting everything from national productivity to individual purchasing power. As prices increase, the interest rates on loans often rise, making borrowing more expensive and slowing down investments. This can lead to a reduction in capital available for businesses, impacting their ability to expand or maintain operations. On a broader scale, governments may need to adjust fiscal policies to manage the economic strain, which could include changes to taxes or public spending. These adjustments can have ripple effects throughout the economy, influencing both market dynamics and consumer behavior.

Question 17

1. What is one potential effect of rising inflation rates mentioned in the paragraph?

Answer 17

A. It may lead to adjustments in fiscal policies, including changes to taxes or public spending. (correct answer)
B. It decreases the interest rates on loans, making borrowing cheaper.
C. It increases the amount of capital available for businesses to expand.
D. It eliminates the need for governments to manage economic strain through policy changes.