Economic Policy Flashcards
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Questions and Answers

In a free enterprise system, governments address public problems through policy to ensure that citizens' needs are met and protected. What is another purpose of economic policy?

  • Economic operations of businesses are controlled. (correct)
  • Workers earn more than workers in other countries. (correct)
  • The nation's level of productivity remains steady. (correct)
  • All of the above.
  • What is a government's monetary policy?

    Its plan to control the money supply.

    Which statements describe a free enterprise system? Check all that apply.

  • Consumers and producers make their own decisions. (correct)
  • Citizens can own property. (correct)
  • Supply and demand drives production. (correct)
  • The government sets prices and wages.
  • The government employs all workers.
  • Citizens can accumulate wealth. (correct)
  • Based on the graph that shows nonfarm jobs in the United States from 2008 to 2013, what conclusion can be drawn about the number of nonfarm jobs?

    <p>Started going down in 2008.</p> Signup and view all the answers

    What does economic interdependence mean?

    <p>Economic policies must balance the needs of governments, individuals, and businesses.</p> Signup and view all the answers

    An organization whose members have a common cause for which they seek to influence public policy is called an ________ _____.

    <p>Interest group</p> Signup and view all the answers

    According to the scenario in Country D, who is most affected by the economic challenges?

    <p>The government, workers, and businesses of Country D.</p> Signup and view all the answers

    Rules ensuring that businesses offer safe products to consumers are part of a nation's:

    <p>Regulatory policy.</p> Signup and view all the answers

    How can public policy be best defined?

    <p>A course of action the government takes in response to an issue or problem.</p> Signup and view all the answers

    What is the greatest economic challenge that Country D is facing?

    <p>Stagflation.</p> Signup and view all the answers

    Which is the best label for the first step in the economic policy creation process?

    <p>Identify a problem.</p> Signup and view all the answers

    When an economy suffers from low production, what cannot a country do?

    <p>Enjoy a steady rate of economic growth.</p> Signup and view all the answers

    What does the diagram showing a challenge for government policy-makers illustrate?

    <p>Economic policy must reach a balance between needs and ideals.</p> Signup and view all the answers

    Study Notes

    Free Enterprise System

    • Governments use policy to ensure citizens' needs are met and protected.
    • Characteristics include property ownership, demand-driven production, consumer and producer decision-making, and wealth accumulation.

    Monetary Policy

    • Refers to the government's strategy for controlling the money supply, which influences the economy.

    Economic Interdependence

    • Economic policies need to balance the needs of governments, individuals, and businesses.
    • Nonfarm job numbers in the U.S. declined starting in 2008, highlighting economic shifts during that period.

    Interest Groups

    • Organizations formed by members with a common agenda aiming to influence public policy.

    Impact of Inflation and Wages

    • Rising prices and stagnant wages lead to decreased demand and a decline in GDP, affecting government, workers, and businesses of a country.

    Regulatory Policy

    • Encompasses rules that ensure businesses provide safe products to consumers.

    Public Policy Definition

    • Public policy is a government action plan addressing issues or problems.

    Economic Challenges

    • Country D is experiencing stagflation, marked by rising prices without corresponding wage increases, leading to decreased overall demand.

    Economic Policy Creation Process

    • Identifying a problem is the first crucial step in the economic policy creation process, followed by discussing plans and gathering data.

    Production and Economic Growth

    • Low production in an economy hampers its ability to achieve steady economic growth and adequate funding for public safety.

    Balancing Economic Policy

    • Effective economic policy must find equilibrium between practical needs and idealistic standards.

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    Test your knowledge on key concepts of economic policy with these flashcards. The quiz covers topics such as government roles in a free enterprise system and monetary policy. Perfect for students and anyone interested in economics.

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