42 Questions
What is the study of how to increase the amount of available resources and create conditions that will make better use of these resources known as?
Microeconomics
What did Economist Thomas Malthus believe would limit economic progress?
Overpopulation
What is a key to economic growth and development?
Providing people with better education
Who is considered by some to be the father of modern economics?
Adam Smith
What is the name of a free-market economic system in which most of the factors of production and distribution are owned by individuals?
Capitalism
What is a basic right under capitalism?
The right to compete
What is the key determinant used to signal to producers what to produce and how much to produce in a free-market economic system?
Price
What is the quantity of a good or service that producers are willing to sell at different prices during a specific time period known as?
Supply of that product or service
What is a simple supply curve showing?
A relationship between the price of a good and the quantity of that good sellers are willing to offer for sale at a specific point in time
What type of curve shows the relationship between the price of a good and the quantity of that good people are willing and able to buy in a given time period?
Demand curve
What is the main focus of economics?
Employing resources to produce goods and services and distribute them among competing groups and individuals
Which branch of economics studies the behavior of individual people and organizations in specific markets?
Microeconomics
What is the study of how a nation's economy operates as a whole?
Macroeconomics
What is the term for the study of how to increase the amount of available resources and create conditions that will make better use of these resources?
Resource development
What is the definition of economics that involves the study of how society chooses to employ resources to produce goods and services and distribute them for consumption among various competing groups and individuals?
Economics
What is the branch of economics that looks at the operation of a nation's economy as a whole?
Macroeconomics
What is the economic system in which the government owns almost all the major factors of production?
Communism
What is the term used to describe the total value of final goods and services produced within a nation's borders in a given year?
Gross Domestic Product
Which of the following is NOT a type of unemployment?
Procedural
What is the term used to describe a general rise in the price level of goods and services over time?
Inflation
What is the statistic used to measure the pace of inflation or deflation?
Consumer Price Index (CPI)
What is the term used to describe the unemployment that occurs when the demand for labor varies during the year?
Seasonal Unemployment
What is the term used to describe the unemployment that occurs when workers are forced to switch industries or occupations?
Structural Unemployment
What is the term used to describe the economic system that combines elements of capitalism and socialism?
Mixed Economy
What is the term used to describe the economic system in which the government plays a significant role in the allocation of resources?
Command Economy
What is the term used to describe the measure used to report price changes at the wholesale level?
Producer Price Index (PPI)
What is the correct term for the market situation where there are many sellers in a market and no seller is large enough to dictate the price of a product?
Perfect competition
What is the term for a market situation where a large number of firms produce goods that are similar but customers believe there is a difference?
Monopolistic competition
What is the term for a market situation where the entire supply of a good is controlled by a single seller?
A monopoly
What is a characteristic of an oligopoly?
A few large sellers who dominate the market
What is a major premise of a socialist system?
To reduce the inequality in the distribution of wealth
What is a major benefit of socialism?
The emphasis on social equality
What is the type of economic system where almost all of the productive resources are owned by private businesses?
Capitalist
What is the type of economic system where the government makes almost all of the major economic decisions?
Communist
Why has brain drain occurred in many socialistic nations?
Tax rates on well-respected professionals such as doctors tend to be very high
What is the type of economic system where individual consumers make all economic decisions?
None of the above
What is the term for a condition characterized by slowing price increases?
Disinflation
What is the term for a severe recession that is usually accompanied by deflation?
Depression
What type of policy refers to the efforts of the federal government to keep the economy stable by increasing or decreasing taxes and/or government spending?
Fiscal policy
What is the result of the federal government's collection of tax revenues being less than what it spends in a given year?
National deficit
Which organization has the role of managing the money supply and interest rates in the U.S.?
Federal Reserve Bank
What is the term for efforts by the Federal Reserve Bank to control the money supply and interest rates?
Monetary policy
Study Notes
Economics Overview
- Economics is the study of how a society employs its limited resources to produce goods and services and distribute them among competing groups and individuals.
- Macroeconomics studies the operation of a nation's economy as a whole, while microeconomics looks at the behavior of individual people and organizations in specific markets.
- Resource development refers to the study of how to increase the amount of available resources and create conditions that will make better use of these resources.
Economic Systems
- Capitalism is a free-market economic system in which most of the factors of production and distribution are owned by individuals.
- Under capitalism, most of the means of production and distribution are privately owned and operated for profit.
- The foundation of the U.S. economic system is based on capitalism.
- Basic rights under capitalism include the right to compete, freedom of choice, and the right to own private property.
Markets and Prices
- A free market is one in which decisions about what to produce and in what quantities are made by the market.
- Price is the key determinant used to signal to producers what to produce and how much to produce.
- The quantity of a good or service that producers are willing to sell at different prices during a specific time period is known as the supply of that product or service.
- A demand curve shows the relationship between the price of a good and the quantity of that good people are willing and able to buy in a given time period.
- The point at which the supply and demand curves intersect identifies the equilibrium price of the good.
Market Structures
- Perfect competition exists when there are many sellers in a market and no seller is large enough to dictate the price of a product.
- Monopolistic competition exists when a large number of firms produce goods that are similar but customers believe there is a difference.
- A monopoly exists when the entire supply of a good is controlled by a single seller.
- An oligopoly is a market that is characterized by a few large sellers who dominate the market.
Socialism and Communism
- A major premise of a socialist system is to reduce the inequality in the distribution of wealth.
- A major benefit of socialism is the emphasis on social equality.
- Under communism, almost all of the productive resources are owned by the government.
- Communist systems are often characterized by a lack of incentives to work hard or produce quality goods or services.
Economic Indicators
- The gross domestic product (GDP) is the total value of final goods and services produced within a nation's borders in a given year.
- Other important economic indicators include the unemployment rate, the price indices, and the gross domestic product (GDP).
- The four basic types of unemployment are frictional, structural, seasonal, and cyclical.
- The consumer price index (CPI) is a statistic used to measure the pace of inflation or deflation.
Fiscal Policy
- Fiscal policy refers to the efforts of the federal government to keep the economy stable by increasing or decreasing taxes and/or government spending.
- Fiscal policy involves increases or decreases in government spending and taxes.
- When the federal government's collection of tax revenues is less than what it spends in a given year, it results in a national deficit.
Monetary Policy
- Monetary policy refers to the efforts of the Federal Reserve Bank (the Fed) to control the money supply and interest rates.
- The Federal Reserve Bank operates as a semi-private organization not under the direct control of the government.
- One way to lessen the U.S. government budget deficit is to cut spending.
This quiz covers the basics of economics, including the definition of economics and how societies produce and distribute goods and services
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free
