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EOC Review Goals 7, 8 & 9
EOC Review from Study Guide
59
Other
10th Grade
01/07/2011

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Cards

Term
Inflation
Definition
Causes prices to rise (dollar will buy fewer goods (Fed can slow down spending by raising interest rates & taxes)
Term
Law of Diminishing Returns
Definition
Rule that states after a certain point in production, profit will begin to decrease
Term
Scarcity
Definition
Problem that exists because we can't satisfy all the wants of all the people (causes prices to rise)
Term
Opportunity Cost
Definition
The value you place on what you gave up to make your 1st choice
Term
Opportunity Cost
Definition
Example of this is the income you would give up by going to college for 4 years instead of working
Term
Recession
Definition
Part of the business cycle that is defined by 2 straight quarters (at least 6 months) of declining GDP
Term
Business Cycle
Definition
The ups and downs of the economy
Term
Recession & Depression
Definition
The difference between these 2 economic situations can be seen by the severity in the contraction
Term
Limited Liability
Definition
This describes the fact that people who invest in corporations are only responsible for the amount they invested
Term
Unlimited Liability
Definition
Term that describes how sole proprietors and partners are responsible for all debts of the business
Term
Antitrust Laws
Definition
Laws that protect competition by prohibiting monopolies (companies can't merge if it will cause a monopoly)
Term
Cash Reserves
Definition
Amount the Federal Reserve requires banks to keep on hand
Term
Training workers
Definition
This helps to improve worker output & increases productivity
Term
Price Increase
Definition
The effect a drought would have on prices of crops
Term
Fixed Cost
Definition
Costs that remain every month
Term
Expansion Phase
Definition
Phase of the business cycle when the economy is on the rise & businesses are investing
Term
Federal Reserve
Definition
Part of the government that can help inflation by decreasing the money supply (increase interest rates)
Term
Entrepreneurs
Definition
People who take a risk by opening a business in hopes of making a profit (most important factor of production)
Term
Excise Tax
Definition
Tax on certain goods (alcohol, tobacco, luxury items)
Term
U.S. Dollar
Definition
This is the currency typically used for trade because it has a fairly stable value
Term
Comparative Advantage
Definition
When a country or company can produce a good cheaper than someone else (Ex.: Middle East- oil, Canada- timber)
Term
Demand Schedule
Definition
Table that shows how the demand curve will shift to the left when it decreases & to the right when it increases)
Term
Market/Free Enterprise
Definition
Type of economy in which decisions are made by the consumer (type U.S. has)
Term
Command Economy
Definition
Type of economy in which government planners make all the decisions & own all of the resources
Term
Incentives
Definition
Things the government offers to encourage certain behavior (Ex.: tax breaks, subsidies)
Term
Lowering taxes
Definition
This is how the government can encourage people to spend more money
Term
Equilibrium Price
Definition
The point at which supply and demand curves intersect on a graph
Term
Bull Market
Definition
Description of the stock market when prices are expected to rise
Term
Bear Market
Definition
Description of the stock market when prices are expected to fall
Term
Interest
Definition
The cost of using credit
Term
Price floor
Definition
The minimum amount of something (Ex. would be the minimum wage)
Term
Fixed Rate Loan
Definition
Type of loan that would not be affected by inflation
Term
Tradeoff
Definition
Exchanging money for goods
Term
Decrease the money supply
Definition
How the government would respond to inflation (increase or decrease money supply)
Term
So they can pay depositers
Definition
This is why the Fed requires banks to keep a certain amount of cash on hand (cash reserves)
Term
Scarcity
Definition
Unlimited wants, limited resources
Term
Opportunity cost
Definition
The opportunity that you forfeited to choose something else
Term
Monopolies
Definition
Some of these are legal because they are the only ones to provide a service/product at a low cost
Term
Entrepreneur
Definition
The most important factor of production because they create jobs
Term
Supply and demand & the Market
Definition
This is what determines prices in a free enterprise/market economy
Term
Trade-off
Definition
When the government uses funds to pay for 1 service instead of another, this is what it's called
Term
Service industry
Definition
Banking is an example of this type of industry (doing something for consumers, rather than producing a product)
Term
Corporation
Definition
This type of business involves stocks, dividends (more regulations, less liability)
Term
Progressive tax
Definition
Type of tax that increases as you make more (income tax is an example)
Term
Regressive Tax
Definition
Type of tax that is the same % for everyone, regardless of income (sales tax is an example)
Term
Capital good
Definition
Good used to produce another good
Term
Labor
Definition
A worker in an assembly line is an example of this
Term
Traditional Economy
Definition
The type of economy where bartering would take place
Term
GDP
Definition
How the U.S. economy is measured (add final value of all goods & services)
Term
Shortage
Definition
Not enough of something- causes prices to rise
Term
Lower prices
Definition
What the result would be if OPEC increased the production of gas
Term
Sell Stocks
Definition
How a corporation would raise money
Term
Deficit Spending
Definition
When the government spends more money than it collects
Term
Merger
Definition
When 2 companies join (can cause monopolistic practices)
Term
Human Capital
Definition
Robotics can cause the need for this to decrease
Term
Savings Accounts
Definition
These types of accounts are used to store value
Term
Profit
Definition
The motivating factor of businesses
Term
Interdependence
Definition
Trade is an example of this
Term
Supply usually exceeds demand
Definition
This is why a slowdown usually follows a peak
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