Economics Exam Study Guide – Flashcards
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Desire, ability, and willingness to purchase a product
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Demand
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Currency that has value because the government says it does:
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Fiat money
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Quantity demanded changes because the relative price of a product changes:
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Substitution effect
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Cost of producing one more unit of a product.
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Marginal cost
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Central authority determines the What, How, and For Whom decisions:
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Command economy
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Shares of a corporation:
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equities
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Price at which a product sells out and which satisfies all demand:
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Equilibrium price
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Tax on the increased value of a product at each stage of production
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Value added tax
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Degree to which a producer changes the supply of a product in response to a price change.
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Supply elasticity
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Industry dominated by a few very large sellers.
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Oligopoly
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Business organization in which the business has all the rights of an individual.
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corporation
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Cost of the next best use of money, time, or resources after making one choice.
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Opportunity cost
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Government spending that must be authorized each year.
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Discretionary spending.
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Workers don't have to belong to a union to be hired but must join after beginning work.
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Union shop
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Resources needed to produce goods and services.
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Factors and production.
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Value of goods exported compared to value of goods imported.
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Balance of payments.
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Location where businesses get tax advantages.
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Enterprise zone.
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Value of final goods and services produced both within the country and abroad.
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Gross domestic product.
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Goods shipped out of country.
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Exports
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Government's plan for using taxing and spending to stabilize the economy.
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Fiscal policy.
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All the goods and services that all businesses produce al all price levels.
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Aggregate supply.
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Official currency of the European Union.
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Euros
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Program providing tax credits or cash to the poor.
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Earned income tax credits.
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Failure to repay a loan.
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Default
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Value of final goods and services produced within a country.
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Gross domestic product
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Lowest interest rate banks will charge their customers.
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Prime rate.
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State-owned joint operations which were run by peasants in the Soviet Union.
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Collective farm.
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Percent of deposits a bank must hold in its vaults or deposit with the Federal Reserve.
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Reserve requirement.
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Union organized by Lech Walesa in Poland.
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Solidarity
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The fundamental problem that economics tries to solve is how to... 36
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Satisfy unlimited wants with limited resources
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Individuals earn their incomes in... 37
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Factor markets.
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The free enterprise economy thrives on all of the following EXCEPT... 38
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Central government planning.
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The chief disadvantage of a sole proprietorship is that... 39
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The owner has unlimited liability
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A multinational corporation... 40
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Has manufacturing or service facilities in several countries.
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The study of the economic behavior of individuals and firms is called... 41
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Microeconomics
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A demand curve shows all of the following EXCEPT... 42
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The supply produced at every price.
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A modest price increase for local cable television service has had little or no effect on the demand, indicating that demand for the product is... 43
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Inelastic
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In a market economy, a low price is a signal for... 44
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Producers to supply less and consumers to buy more.
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At a given price, a surplus occurs when... 45
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The quantity supplied is greater than the quantity demanded.
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The concept of laissez-faire means... 46
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Keep government out of business.
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A market structure characterized by identical products and a large number of reasonably well-informed buyers and sellers who act independently describes... 47
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Perfect competition
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When labor and management decide to go to arbitration, both parties... 48
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Are willing to accept the decision of a third party as binding.
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The theory that states that the supply and demand for workers' skills determines their wages is the... 49
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Traditional theory of wages.
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The single most important source of revenue for the national government is the 50
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Individual income tax.
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If one individual earns $10,000 and pays $2,000 in taxes and a second individual earns $100,000 and pays $20,000 in taxes, the government is using a .... 51
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Proportional tax.
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The steps in initiating and approving a federal budget occur in this order... 52
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President, House of Representatives, Senate, president.
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The federal deficit has all of the following effects EXCEPT... 53
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Lower interest rates.
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The Federal Reserve notes used as currency today are... 54
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Inconvertible fiat money.
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The most recognized measure of stock performance is the Dow-Jones Industrial Average, which measures... 55
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30 representative stocks on the New York Stock Exchange
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The amount of money of money the consumer sector of the economy has available for spending after personal income taxes have been deducted is... 56
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Disposable personal income
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Since 1790, when the United States' center population was near Baltimore, the population has moved steadily... 57
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West
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After passing through a trough, the business cycle enters a period of ... 58
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Expansion
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In a market economy, a high price is a signal for... 59
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Producers to offer more and consumers to buy less.
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The unemployment rate is not a completely accurate measure of how many people are out of work because it... 60
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Doesn't count dropouts.
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The Fed uses all of the following to conduct monetary policy EXCEPT... 61
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Price controls.
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The total receipts test is a method of estimating... 62
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Demand elasticity.
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Supply-side economics attempts to stimulate output and lower unemployment by... 63
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Reducing taxes to stimulate investment and consumer spending.
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A long-range effect of the baby boom will be... 64
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An increase in transfer payments.
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Collective bargaining refers to... 65
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Labor-management negotiations.
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Absolute advantage and comparative advantage are terms related to... 66
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Nations engaged in trade.
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Trade barriers are enacted to... 67
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Protect domestic industry.
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Perfect competition is characterized by all of the following EXCEPT... 68
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Product differentation.
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One effect of NAFTA was to... 69
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Reduce tariffs among the United States, Canada, and Mexico.
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In the final years of the Soviet Union, Mikhail Gorbachev instituted a policy of perestroika, which called for... 70
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Restructuring the economy and converting to a market economy.
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The Japanese economy is characterized by... 71
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Capital-intensive industries.
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The most popular and widely publicized measure of stock market performance on the New York Stock exchange is the... 73
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Dow-Jones Industrials
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Multinational corporations... 74
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Have operations in several different countries.
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The borrowing power of a developing nation is weakened if it has a history of... 75
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Expropriation.
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A modified free enterprise economy has all of the following advantages EXCEPT... 76
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The guarantee of a job for anyone willing and able to work.
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Eisenhower
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Interstate Highways
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Rockefeller
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Standard Oil Monopoly
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Gates
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Internet Software
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Watt
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Steam Engine
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Warner
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Movies: Common Culture
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Durrant
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Coca Cola: Advertising
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Morgan
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Financier: Financial Markets
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Luce
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Time Magazine : Common Culture
