Economics Unit Test

The study of human efforts to satisfy seemingly unlimited wants through the use of limited resources.

what goods and services are produced? how are they produced? and for whom?

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.

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.

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.

when people make the economic descision in free markets

a command system in which the central government directs all major economic decisions

The economic system of the United States is a market economy in which buyers and sellers answer the four basic economic questions.

tax based on taxpayer’s ability to pay.

tax in which people with lower incomes pay a larger portion of their income.

tax on the manufacture, transportation, sale, or consumption of certain items such as gasoline,liquor, or cigarettes.

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.

the sum of all goods and services produced in the nation a year

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.

A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food and medical care.

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.