Economics exam Word Scramble

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Question	Answer
What is a basic principle of the law of demand?	when a good's price is lower, people will buy more of it
Why does even a free market economy need some government intervention?	to provide for things that the marketplace does not address
Cash that banks must keep in the vault.	required reserves
Use of resources in a way that maximizes output of goods and services	Efficiency
Which of the following is a good that might not be bought when prices rise?	luxury
Which of the following is a critical rule for determining whether something is a public good?	the total benefits to society are greater than the total cost
A standard renters insurance policy would cover each EXCEPT… A TV and some sneakers, stolen in a robbery A new window when a baseball breaks the original one A week of hotel reservations when the tenant has to move out due to fire damage	A small TV and some sneakers, stolen in a robbery !!A new window when a baseball breaks the original one!! A week of hotel reservations when the tenant has to move out due to fire damage
This is the minimum required by law, only repairs the vehicle you hit, not your own	Liability
The rate of inflation is most commonly measured by use of	the consumer price index
Which of the following is characteristic of a traditional economy?	children tend to have the same jobs as their parents did
What is the opportunity cost of a decision?	the most desirable alternative given up for the decision
Fiscal policy is actions taken by ______________ to stabilize the economy.	the government
An efficient economy is one that ____.	uses its resources to make the most goods and services
The resources used to make all goods and services are the ____.	factors of production
Your renter's insurance policy costs $20/month and has a $1,000 deductible. A thief breaks into your apartment and steals your $800 TV set. How much would your insurance company pay?	$0
Explain the concept of compound interest in the context of savings and retirement planning.	Compound interest refers to the interest calculated on the initial principal and also on the accumulated interest of previous periods, which can significantly impact savings and retirement planning.
Which of the following scenarios would cause the nation’s money supply to INCREASE?	Lowering interest rates
The purpose of a production possibilities graph is to _____.	show alternative ways to use an economy's resources
When buyers will purchase exactly as much as sellers are willing to sell, what is the condition that has been reached?	equilibrium
What determines the price and quantity produced of most goods?	the interaction of supply and demand
Any resources that are made by humans and used to create other goods and services are called _____.	Capital
What is inflation?	Inflation is an economic term that describes a general increase in prices 📈 and a fall in the purchasing power of money 📉.
Each of these is considered an "out-of-pocket" expense EXCEPT… Your monthly premium A copay of $15 to fill a prescription A $1000 deductible if you're in an auto accident	!!!!!Your monthly premium!!!! A copay of $15 to fill a prescription A $1000 deductible if you're in an auto accident
What happens to the money circulation, when the FED orders a "tight" money policy?	less money is put into circulation
When would Congress most likely use contractionary fiscal policy?	During periods of high inflation
What do sellers do if they expect the price of goods they have for sale to increase dramatically in the near future?	store the goods until the price rises
What is the purpose of creating a budget?	To track and manage expenses, prioritize spending, and achieve financial goals.
Someone broke into Sam’s car by smashing the passenger window. Which type of auto insurance coverage will help cover the cost to get the window replaced?	Comprehensive cc
What is an APR in the context of credit cards?	Annual Percentage Rate, which represents the yearly interest rate charged on outstanding balances
What is the impact of interest rates on savings accounts?	Higher interest rates lead to higher returns on savings
Which is an example of expansionary fiscal policy?	The government increases spending by building more infrastructure
Land, labor, and capital	Factors of production
What does it mean when the demand for a product is inelastic?	a price increase does not have a significant impact on buying habits
Which of the following is the best example of the law of supply?	a sandwich shop increases the number of sandwiches they supply every day when the price is increased
Which of the following is not an example of a public good? shopping malls national parks highways municipal libraries	shopping malls
Situation in which quantity demanded is greater than quantity supplied	Shortage
What happens to a market in equilibrium when there is an increase in supply?	Quantity supplied will exceed quantity demanded, so the price will drop
On which kinds of goods do governments generally place price ceilings?	Those that are essential but too expensive for some consumers
hose that are essential but too expensive for some consumers	goods for which the demand falls when income rises
Expansionary fiscal policies are laws aimed at reducing unemployment. How might Congress use expansionary fiscal policy?	Increase government spending and decrease taxes
Why are all goods and services scarce?	All resources are scarce
The primary role of the Federal Reserve Bank is to steer the economy by	controlling the money supply.
Paid effort that people devote to a task	Labor
Explain the difference between fixed and variable expenses in a budget.	Fixed expenses are regular, predictable costs that remain constant each month, while variable expenses are costs that can fluctuate from month to month.
What shows the quantities of products demanded at each price by all consumers in a market?	a market demand schedule
How is future price related to current demand?	If the price is expected to rise, current demand will rise
How does a credit score impact an individual's financial health?	It affects their ability to access credit, the interest rates they receive, and their overall financial stability.
During a recession, the Fed should use _____ to help the economy grow and create jobs.	an expansionary policy
What is one of the most important advantages of a free market?	it encourages growth
Use of fewer resources than the economy is capable of using	Underutilization
The lack of which of the following represents a scarcity?	enough workers to finish two jobs because there's a limited supply of worker
A shift in the demand curve means which of the following?	a change in demand at every price
Contractionary fiscal policy are law aimed at reducing inflation. How might Congress use contractionary fiscal policy?	Decrease government spending and increase taxes
The most attractive alternative that is given up when an economic decision is reached.	Opportunity Cost
What is a factory building an example of?	physical capital
The tools of fiscal policy are...	Taxes and Government spending
What incentive motivates a manufacturer to sell a product?	making profits on sales
Lowering interest rates to stimulate the economy is called:	Expansionary monetary policy
An example of a shortage is limited amounts of ______.	food available because the trucks carrying it are on strike
What is the historical relationship between interest rates (as measured by the federal funds rate) and US recessions?	interest rates fall during recessions
This is what you have to pay before the insurance company will pay anything	deductible
The opportunity cost of a decision can be examined by using a ____.	Production possibilities graph
Frank has an auto policy with a coverage limit of $30,000 and a deductible of $1,000. He gets into an accident and the damages to his car total $6,200. Fortunately, he has collision coverage. How much will Frank need to pay out-of-pocket?	$1,000
When financial planning, what should you determine first?	needs & goals
Which policy would help fight inflation?	Contractionary
What is an insurance premium?	Your monthly payment to your insurer, regardless of whether you use any services

Created by: vilaboy