Economics Unit Test – Flashcards
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The study of human efforts to satisfy seemingly unlimited wants through the use of limited resources.
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What is economics?
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what goods and services are produced? how are they produced? and for whom?
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What are the three basic questions of economics?
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Scarcity is a condition that exists because society does not have all the resources to produce all the goods and servicesthat everyone wants. In my own life an example of scarcity is: if you have $25.00, and you want a shirt and skirt that totals to $50.00, you have to sacrifice the skirt and only by the shirt.
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What is scarcity? Give an example in your own life of dealing with scarcity.
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Fiscal Policy is the involvement in using government spending and taxation to influence the economy. The government uses fiscal policy to influence the economy by shaping how much money the government will spend and how much it will collect through taxes and borrowing.
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What is fiscal policy? Explain how government uses fiscal policy to influence the economy.
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Monetary policy involves controlling the supply of money and credit to influence the economy. Government uses this to influence the economy because American's exchange goods and services through a vast systemof money and credit.
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What is monetary policy? Explain how the government uses monetary policy to influence the economy.
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when people make the economic descision in free markets
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Capitalism
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a command system in which the central government directs all major economic decisions
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Communism
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The economic system of the United States is a market economy in which buyers and sellers answer the four basic economic questions.
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Identify and describe the economic system of the United States.
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tax based on taxpayer's ability to pay.
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progressive tax
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tax in which people with lower incomes pay a larger portion of their income.
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regressive tax
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tax on the manufacture, transportation, sale, or consumption of certain items such as gasoline,liquor, or cigarettes.
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excise tax
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The central bank of the United States. Established by congress in 1913, the FRS consists of the Board of Governors - a central governing body in Washington, D.C. - and 12 Regional Reserve Banks.
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Federal Reserve System
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the sum of all goods and services produced in the nation a year
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Gross Domestic Product
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An unemployment rate of about 4%-6% is considered "healthy". Lower rates are seen as inflationary due to the upward pressure on salaries ; higher rates threaten a decrease in consumer spending.
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unemployment rate
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A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food and medical care.
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Consumer Price Index
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Statistics that provide information about the performance of the economy and its position in the business cycle., Statistics that provide information about the performance of the economy and its position in the business cycle.
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economic indicators
