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Economics Sem. 1
| Question | Answer |
|---|---|
| Inflation | the rise in the general level of prices |
| Branch of the U.S. Treasury Dept. in charge of collecting taxes | The Internal Revenue Service (IRS) |
| Microeconomics | Microeconomics is a branch of economics that studies the behavior of individuals and firms in making decisions regarding the allocation of scarce resources and the interactions among these individuals and firms |
| conglomerate | A firm that has at lease 4 businesses, each making unrelated products (none of which are responsible for the majority of its sales) |
| substitution effect | the change in quantity demanded because of the change in the relative price of the product |
| goods | merchandise or possessions. Items that are economically useful or that satisfy an economic want. |
| market economy | in a market economy, people or firms act in their own best interest to answer the what, how, and for whom questions. |
| disposable personal income | the total income that a consumer sector has at its disposal after personal income taxes. |
| a cooperative | a voluntary association of people formed to carry on some kind of economic activity that will benefit its members. |
| expenditures | an amount of money spent |
| financial/capital account | it contains domestic investment from foreign countries; is a key component of the balance of payments; contains foreign investment in the domestic sector. |
| human capital | the education and experience of the labor force. |
| Consumer Price Index (know how it works) | used to measure price changes for a market basket of frequently used consumer items. |
| supply & demand (be able to read and understand a supply & demand chart) | If price is below equilibrium level then quantity demanded will exceed quantity supplied. Excess demand or shortage will exist. If price is above equilibrium level, then quantity supplied will exceed quantity demanded. Excess supply or surplus will exist. |
| elasticity | a measure of responsiveness that tells us how a dependent variable (such as a quantity) responds to a change in an independent variable (such as price); 10% change in price leads to 40% change in demand, elasticity is 4. |
| liability | the state of being responsible for something, especially by law |
| specialization and exchange | a country can produce beyond its production possibility curve, resources can be used more efficiently, larger quantities of goods and services can be produced |
| comparative advantages | Specialize in the production of that good; one country might be able to produce more of an item that another country. |
| theory of rational expectations | states that one should use past experiences along all of the information available to him/her. |
| Which capital markets are the stock market associated with | ownership in companies; the NASDAQ; 401(k)s and individual retirement accounts. |
| What will decreasing personal tax rates do? | increase personal income, increase spending, and economic growth |
| demand curve | a demand curve is a graph depicting the relationship between the price of a certain commodity and the quantity of that customers are willing to purchase at each price |
| What is equilibrium present in a market? | When the quantity demanded equals the quantity supplied |
| Losses and business failures | help redirect resources away from unproductive projects |
| the law of comparative advantage | Specialization in goods and services one can produce at a low cost makes it possible for trading partners to produce a larger joint output |
| When will income and living standards of a nation increase? | When the availability of goods and services that people value increases. |
| When the government fund a project that creates jobs, it does what? | Either tax or borrow from a private sector |
| secondary effect | Producers will increase the production; if more of a product is needed producers will meet the need by increasing the availability of that product. |
| free market economy | Consumption and investment decisions shape the future course of the national economy. |
| Why do banks choose to borrow directly from the Federal Government? | they need additional reserves and cannot borrow from other banks. |
| economics | the social science that deals with the study of how people satisfy seemingly unlimited and competing wants with the careful use of scarce resources. |
| scarcity | Condition that results from society not having enough resources to produce all the things that people would like to have. |
| partnership | the relationship between two or more people to do trade or business |
| needs | of necessity Food, water, shelter, clothing, etc. |
| conglomerate goods | in most cases, a conglomerate supplies a variety of goods and services that are not necessarily related to one another |
| trade-offs | People face these or alternative choices whenever they make an economic decision. |
| microeconomics | the part of economics concerned with single factors and the effects of individual decisions |
| market equilibrium | A situation in which prices are relatively stable and the quantity of goods or services supplied is equal to the quantity demanded |
| marginal utility | the extra usefulness or satisfaction that a person gets from acquiring or using more units of a product. |
| laissez-faire | the philosophy that government should not interfere with commerce or trade. |
| fixed cost | the cost that a business incurs even if the plant idle and output is zero |
| industrial union | an association of all workers in the same industry regardless of the job each worker preforms |
| central bank | the bank that can lend to other banks in time of need |
| federal budget | the annual plan outlining proposed revenues and expenditures for the coming year prepared by the federal government. |
| trust funds | Created for a beneficiary who receives the benefits from the trust (such as assets, income, etc.), a fund can contain nearly any asset imaginable, including stocks, cash, bonds, property or other types of financial assets. |
| municipal bond | is a bond issued by state or local governments |
| modified union shop | When workers do not have to belong to a union to be hired and cannot be made to join one to keep their job. |
| Lorenz Curve | the curve that shows how much the actual distribution of income varies from an equal distribution |
| commodity money | money that has an alternative use as an economic good. |
| macroeconomics | the part of economics concerned with large-scale or general economic factors, such as interest rates and national productivity. |
| theory of negotiated wages | States that organized labor's bargaining strength is a factor that helps determine wages. |
| perfect competition | Characterized by a large number of well informed, independent buyers and sellers who exchange identical products. |
| Internal Revenue Service | Branch of U.S. Treasury in charge of collecting taxes. |
| Opportunity Cost | The loss of potential gain from other alternatives when one alternative is chosen |
Created by:
a.j.reyes
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