economics flash cards

  1. 1. Unemployment hurts the economy as a whole because
    more unemployment = less people paying taxes and spending money
  2. 2. The unemployment rate is
  3. 3. Full employment means
    less that 4% of unelployment
  4. 4. Structural unemployment can result from
    technological takeover
  5. 5. Seasonal unemployment:
    unemployment during season (Farm, schliterban)
  6. 6. During the Great Depression of the 1930’s, the United States faced severe
  7. 7. Serious recessions in 1974–75, 1980–82, and 1990–91 were marked by high levels of
    siclical unemployment
  8. 8. When prices rise, workers often bargain for higher wages to stay ahead of inflation. To cover the cost
    • of these higher wages, producers often raise prices, continuing the cycle. What do economists call this
    • cycle?
    • Price wage cycle
  9. 9. What is the system of exchange that does not involve money called?
  10. 10. In Virginia in the early 1600s, tobacco was used as a form of
  11. 11. What was the major success of the Federal Reserve system in its early years?
    Funded WW1
  12. 12. The Gold Reserve Act of 1934
    going off the gold standard
  13. 13. What is an example of automated banking?
  14. 14. What caused the Panic of 1907?
    People’s money used to finance other’s investment
  15. 15. The traditional fear of a single bank dominated by a few financiers led to the
    creation of 12 fed banks
  16. 16. When making loans, the Fed considers whether the
    inflation, consumer confidence, GPD growth, over all health
  17. 17. In serving as the government’s bank, the Fed
    government, regulation, & supervision
  18. 19. The major goal of the Fed is to
    move money in and out of circulation
  19. 20. When the Fed charges lower interest rates to borrow money:
    money supply, easy money
  20. 21. The prime rate is the interest rate
    givento trusted customers with good hiscores
  21. 22. A flat rate tax is also called a
    pagment made to local government on income earned, same for everyone
  22. 23. A tax that takes a larger percentage of income from low-income groups than from high-income
    • groups is
    • regressive tax
  23. 25. To help reduce inflation, Congress might
    decrease purchase power of dollar
  24. 27. Who established a number of socialist communities in the early 1800s?
    owen, fortinbrah
  25. 28. Under Stalin’s five-year plans:
    USSR struggled to keep up with expectations
  26. 29. The Four Modernizations targeted modernization of
    agriculture, industry, national defense, science and technology
  27. 30. When a nation can produce a certain good with greater efficiency than a can a trading partner, that
    • nation has a(n)
    • absolute advantage
  28. 33. A rise in interest rates in the U.S. will cause what to happen?
    Fall in investments on credit cards, rise in bank accounts
  29. 34. Historically, embargoes have been enacted because
    political reasons
  30. 36. Examples of existing regional trade agreements include the
    European union, NAFTA
  31. 37. By building plants in countries with which they do business, multinational corporations are able to
    avoid some
  32. 38. An entrepreneur is a(n)
    one who organizes, manages, and assumes the risks of a buisness
  33. 39. Specialization increases productivity because
    allows partners to divide tasks
  34. 40. A company might improve efficiency by
  35. 41. You are in the clothing store. You see a pair of pants and a T-shirt that you like. However, you have
    • only enough money for one item of clothing. You decide to buy the pants. What is the opportunity
    • cost of your choice?
    • The price of t shirt
  36. 42. The means of exchange that relies on bargaining is
    free market
  37. 43. A standardized means of exchange is
    anything the gov’t posts as monetary value
  38. 44. The purpose of money is to serve as a
    means of exchange
  39. 48. In which economic system are the answers to the basic economic questions determined by custom?
  40. 53. The quantity of goods that consumers are willing and able to buy at a series of prices can be listed on
    • a demand
    • Curve
  41. 54. A popular rock band’s new CD receives a very bad review. The band’s popularity declines and
    • demand for their CDs decreases, causing the demand curve to shift
    • left
  42. 55. If the U.S. government prohibited trade with a foreign country, the demand curve for American
    • products sold to that country would move
    • left
  43. 56. Which of the following factors affect a product’s demand elasticity?
  44. 57. If a product is not a necessity, it will tend to have
    elastic demand
  45. 58. If producing a good takes a great deal of time, money, and resources that are not readily available,
    • that good has
    • inelastic demand
  46. 59. Gold is an example of a good that has
    inelastic demand
  47. 60. If, after the passage of time, the determinants of supply cause an increase in the supply of a product,
    • the supply curve for that product shifts
    • right
  48. 61. If, after the passage of time, the determinants of supply cause an decrease in the supply of a product,
    • the supply curve for that product shifts
    • left
  49. 62. If new pollution controls are imposed on companies that make wrenches, the supply of wrenches will
  50. 63. The three stages of production that can be predicted by the law of diminishing returns are increasing
    • returns, diminishing returns, and
    • no returns
  51. 72. Over time, a price floor may cause
  52. 73. Critics charge that rationing is an unwise economic policy because it
    expensive, fine, consuming, black-market
  53. 74. The place where goods are exchanged illegally at prices that are higher than officially established
    • prices is called a
    • black market
  54. 84. The chief advantage of sole proprietorships is that they are
    easy start up, control, profit
  55. 85. The disadvantage of a sole proprietorship that could directly affect the owner’s family is
    all yours
  56. 86. The advantages of partnerships include ease of start-up, specialization, shared decision making, and
    • unlimited liability or sole responsibility
    • shared business losses
  57. 87. The business organization that can hire workers and own property as if it were an individual is the
  58. 88. Two advantages of corporations that benefit stockholders are flexibility and
    unlimited life
  59. 89. Which of the following are disadvantages of corporations?
    Corporate charters, regulation, decision making
  60. 90. The Standard Oil Trust was an example of a
  61. 91. A major advantage of corporate mergers is
    efficiency, lower costs, financial capital
  62. 92. Which of the following forms of business organizations does not focus on financial gain for its
    • members?
    • corperations
  63. 97. What are the 3 C’s of Credit?
    Character, capacity, & collateral
  64. Rate of return
    Income / outcome
  65. Compound interest
    Intrest on intrest
  66. Opportunity cost
    Next best thing
  67. Incentive
    Influential reward
  68. Income
    Money earned
  69. Wealth/Net worth
    Lotal liabilities
  70. Rule of 72
    How long to double money
  71. Financial risk
    May not return money
  72. Market price risk
    Price may go down
  73. Liquidity risk
    Investment to cash
  74. Real rate of return
    ROR after adjustment
  75. Fraud risk
    • Investment = lie
    • Nominal rate of return
    • Unadjusted return
  76. Passbook savings account
    Bank account
  77. Certificate of deposit
    Saving deposit
  78. U.S. savings bond
    Gov’t bond
  79. Annual rate of return
    % $ earned
  80. Inflation
    Price up
  81. Money market mutual f
    Short loan
  82. Stocks
    Shares ownership of corp
  83. Stock mutual fund
    More risk, more money
  84. Real estate
  85. Inflation risk
    Real value of investment
  86. Risk/Reward ratio
    Grater risk, grater outcome
Card Set
economics flash cards