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| Everything comes at a price. |
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| Land, Labor, Capital, Entrepreneurship |
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| Physical and Mental talents of an individual used to produce a product or provide a service |
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| Manufactured goods used in the production of goods and services |
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| Person who assumes risk and juggles other resources |
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| Production Possibilies Curve is... |
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Definition
| a model used to demonstrate oppurtunity cost as it diagrams various combinations of goods/services an economy can produce when all productive resources are employed |
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| Production Possibilies Curve is... |
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Definition
| a model used to demonstrate oppurtunity cost as it diagrams various combinations of goods/services an economy can produce when all productive resources are employed |
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Term
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Definition
| can be reproduced naturally (wood) |
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Definition
| can't be remade naturally or take a long time to reproduce (coal) |
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| Communism or Socialism. Government has the right to own property and make all decisions. China and North Korea are countries using this system. |
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Definition
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| Revenue that the governemt takes in annually is a result of... |
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Definition
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| What is government spending |
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Definition
| The amount of money the governemt spends on programs in a given year |
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| Legal justification for the Federal Income Tax |
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Definition
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| Government Spending = Taxes |
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Term
| When government earns more tax revenue than it spends in a year it is... |
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Definition
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| when government gets more tax revenue than it recieves in tax revenue in a year... |
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Definition
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| Interest rates are described as |
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Definition
| the cost of borrowing money |
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Term
| High interest rate result in _______ investment in the economy |
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Definition
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Term
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Definition
| Supply in terms of Macro Economics |
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Term
| Difference between defecit and debt? |
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Definition
| Defecit is the debt generared in a year. Debt is the total debt of the nation |
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Term
| What two things should be done during a recession (fiscal)? |
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Definition
Increase Government Spending
Decrease Taxes |
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Term
| What is the overall purpose for fiscal policy? |
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Definition
| Smooth out the business cyle |
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Term
| What does "Fiscal Policy Lags" mean? |
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Definition
| The effecs of fiscal policy do not take immediate effect on the economy and need a little time to kick in. |
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Term
| Who is the chairperson of the Federal Reserve? |
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Definition
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Term
| Why is i important that the Fed be independent from the business? |
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Definition
| There is no pressure from the gov't to make certain decisions. It remains unpolitical. |
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Term
| How long does the chairperson of the Fed serve? |
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Definition
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Term
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Definition
| Boston, Philly, NYC, Richmond, Kansas City, Detroit |
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Term
| Purpose of Monestary Policy? |
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Definition
| Smooth out the business cycle |
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Term
| Two main goals of the Federal Reserve? |
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Definition
Keep inflation stabilized
Keep Unemployment rate low |
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Term
| Two examples of monetary policy tools are? |
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Definition
Reserve Requirements
Discount Rate |
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Term
| Three actions of the Federal Reserve? |
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Definition
Bank regulator
Bank to other banks
Execute Monetary Policy |
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Term
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Definition
| System of trading goods for oher goods or services. |
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Term
| One of the very first historical forms of money used in large transactions? |
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Definition
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Term
| Four of the Five Attributes or characteristics of money: |
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Definition
| Divisible, Durable, Recognizable, Not Easily Forged |
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Term
| What does divisible mean? |
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Definition
| It can be used to buy things big and small |
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Term
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Definition
| It holds its value and not much goes into maintaining it |
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Term
| What does recognizable mean? |
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Definition
| When it is seen, people know what it is and what it is worth |
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Term
| What does "Not easily forged" mean? |
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Definition
| It cannot be illegally copied or counterfeited |
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Term
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Definition
| Money has other uses besides a form of payment. Ex. Tobacco. |
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Term
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Definition
| A currency that is put into circulation by Gov't decree. Ex. US Dollar |
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Term
| Program that will replace or save your money if they fail or collapse. |
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Definition
| FDIC-Insures accounts up to $250,000. |
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Term
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Definition
| Money multiplies. How far your dollar goes. My $1 for a pencil will be used to by many other things more expensive. |
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Term
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Definition
| Inflated after WWII. Became essentially worthless along with the Revolutionary Currency after the Revolutionary War. This happened because the money wasn't backed by anything and the economic value of it dropped dramatically. |
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Term
| What is the difference between absolute and comparative advantage? |
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Definition
| Absolute doesn't take into account OC as Comparative does |
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Term
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Definition
| Medium of exchange commonly used with an agreed upon value |
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Term
| What three things make the US a mixed-economy? |
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Definition
Households
Firms/Businesses
Government |
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Term
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Definition
| Economics pattern of expansion/recovery and contraction/recession |
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Term
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Definition
Gross Domestic Product
Determines if we are in an expansion or recession. Gross is the amount, Domestics means only in the US, product is consumer goods/services. |
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Term
| Two consecutive quarters of negative GDP |
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Definition
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Term
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Definition
| Consumer Price Index. Measures Inflation |
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Term
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Definition
| The decrease in price of goods. Businesses are lowering price due to low costs in manufacturing products. i.e. TVs |
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Term
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Definition
| GDP=C (Personal Consumption) + I (Private Investment) + G (Government Purchases) + NX (Net Exports: X-M) |
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Term
| What does a change in demand do to the curve? |
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Definition
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Term
| What does a change in quantity demanded do to the curve? |
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Definition
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Term
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Definition
| Taste/Preference, Number of buyers, Income, price of related goods, Consumer expectations |
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Term
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Definition
| Unemployment, Prices, Interest Rate |
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Term
| Three of Five characteristics of GDP: |
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Definition
| Current Market Price, Does it account for price chang, Final good vs. intermediate goods |
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Term
| Unemployment Rate Equation |
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Definition
| (Number of unemployed) Divided by Labor Force (Employed and Unemployed) |
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Term
| Who decides the Unemployment Rate? |
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Definition
| BLS-Beureo of Labor Statistics |
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Term
| Who is not in the labor force? |
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Definition
| Young (16 and Under), Military, Institutionalized (retards), Homemakers, students, elderly-retired, marginal workers (discouraged workers) |
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Definition
| Structural, Frictional, Cyclical, Seasonal |
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Definition
| Due to changed in the overall economy |
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Definition
| Due to the normal workings of economy (lay-offs) |
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Term
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Definition
| Due to the Business Cycle |
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Term
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Definition
| Due to weather and time of year. |
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Term
| What is the difference between Monetary and Fiscal Policy? |
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Definition
Fiscal policy relates to taxes and the spending them
Monetary policy relates to raising and lowering of interest rates by the Federal Reserve |
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Term
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Definition
| Lower tax brackets pay a higher percent |
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Term
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Definition
| Everyone pays the same percent of their income |
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Term
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Definition
| Higher brackets pay a higher percent of their income |
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Term
| Expansionary Fiscal Policy |
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Definition
Government Spending goes up
Taxes go down |
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Term
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Definition
Defecit grows when G>T
Surplus gorws when G |
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Term
| What does the Fed do in a reccession? |
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Definition
| Lower Discount Rate, Lower Required Reserves, and Buy Securities |
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Term
| Market System (Capitalism) |
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Definition
| Private Ownership, Individuals make choices, Gov't protects private properties |
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Term
| Command System (Socialism/Communism) |
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Definition
| Gov't owns property, Gov;t owns firms and directs decisions, Good at feeding people |
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