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Questions and Answers
What is the price at which both the buyer and seller agree?
What is the price at which both the buyer and seller agree?
Equilibrium price
When you consider volunteering at a summer camp rather than working at a summer job, what is this an example of?
When you consider volunteering at a summer camp rather than working at a summer job, what is this an example of?
Opportunity cost
What is the study of choices about wealth made by individual people, households, or businesses?
What is the study of choices about wealth made by individual people, households, or businesses?
Microeconomics
What is the study of large-scale choices about wealth?
What is the study of large-scale choices about wealth?
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What type of economics includes statements of opinion and what should happen?
What type of economics includes statements of opinion and what should happen?
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According to Carl Menger, what could be worth more than diamonds?
According to Carl Menger, what could be worth more than diamonds?
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What is the monthly payment on an insurance policy?
What is the monthly payment on an insurance policy?
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What is the portion of an insurance claim that the policyholder must pay?
What is the portion of an insurance claim that the policyholder must pay?
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Who receives the payment from a life insurance policy?
Who receives the payment from a life insurance policy?
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What school of thought emphasizes the free market, private property, and the limited role of government?
What school of thought emphasizes the free market, private property, and the limited role of government?
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What would be a good question for macroeconomics?
What would be a good question for macroeconomics?
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What is the most important factor of production?
What is the most important factor of production?
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The law of demand states that as the price of a good falls, other things being constant, what will rise?
The law of demand states that as the price of a good falls, other things being constant, what will rise?
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Assume that portable radios and batteries are complementary goods. A surplus in one of the main battery components has caused the price of batteries to fall from $2 per package to $1 per package. What will happen to the demand for portable radios?
Assume that portable radios and batteries are complementary goods. A surplus in one of the main battery components has caused the price of batteries to fall from $2 per package to $1 per package. What will happen to the demand for portable radios?
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What did Adam Smith write in 1776?
What did Adam Smith write in 1776?
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What is Ephesians 4:28?
What is Ephesians 4:28?
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What is the most popular business model in the US today?
What is the most popular business model in the US today?
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What business model possesses individuality and immortality but could be taxed twice on earnings?
What business model possesses individuality and immortality but could be taxed twice on earnings?
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S corporations have less than 35 of what?
S corporations have less than 35 of what?
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What is an investor who has loaned money and is owed a debt?
What is an investor who has loaned money and is owed a debt?
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What is an investor with no liability and few to no duties in a company?
What is an investor with no liability and few to no duties in a company?
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Who agrees to pay back a loan if the original borrower cannot?
Who agrees to pay back a loan if the original borrower cannot?
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What is a corporation's first sale of stock?
What is a corporation's first sale of stock?
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What is the best health indicator of American industry?
What is the best health indicator of American industry?
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What is the most prevalent type of stock?
What is the most prevalent type of stock?
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What symbolizes when a market is rising?
What symbolizes when a market is rising?
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What are privately managed stock portfolios?
What are privately managed stock portfolios?
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What is the distribution of a portion of a company's profit?
What is the distribution of a portion of a company's profit?
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What great risks balance out the many advantages of both the sole proprietorship and partnership models?
What great risks balance out the many advantages of both the sole proprietorship and partnership models?
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What best summarizes J.C. Penney's business philosophy?
What best summarizes J.C. Penney's business philosophy?
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Compared to a partnership, what is the response to the market of corporations due to their organizational structure?
Compared to a partnership, what is the response to the market of corporations due to their organizational structure?
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Compared to a partnership, what kind of loans can corporations get?
Compared to a partnership, what kind of loans can corporations get?
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What does a company's stock represent?
What does a company's stock represent?
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If a corporation files for bankruptcy and sells all its assets, who would last receive payment from the proceeds of the sale?
If a corporation files for bankruptcy and sells all its assets, who would last receive payment from the proceeds of the sale?
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What is the primary purpose of a stock index?
What is the primary purpose of a stock index?
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What was founded by Charles Dow and Edward Jones?
What was founded by Charles Dow and Edward Jones?
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Why are IPOs often less than half of a company's stock?
Why are IPOs often less than half of a company's stock?
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Which form of competition is easy to enter and exit and has undifferentiated products?
Which form of competition is easy to enter and exit and has undifferentiated products?
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What is an example of an ARTIFICIAL barrier to entry?
What is an example of an ARTIFICIAL barrier to entry?
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Who learned to put God first in his life, to be honest and help others, tithing from his first paycheck and giving to his church, a foreign mission, and the poor, and improving the oil industry by lowering prices from 58 cents/gallon to 8 cents/gallon?
Who learned to put God first in his life, to be honest and help others, tithing from his first paycheck and giving to his church, a foreign mission, and the poor, and improving the oil industry by lowering prices from 58 cents/gallon to 8 cents/gallon?
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What is money with nothing of value backing it?
What is money with nothing of value backing it?
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What is money with a commodity like gold or silver backing it that you can get when you turn it into the bank?
What is money with a commodity like gold or silver backing it that you can get when you turn it into the bank?
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What is the payment for being able to use financial capital?
What is the payment for being able to use financial capital?
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What occurs when more money is placed in circulation, and money loses value?
What occurs when more money is placed in circulation, and money loses value?
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What organization insures deposits at commercial banks?
What organization insures deposits at commercial banks?
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Who is responsible for making decisions about increasing and decreasing the supply of money through the purchasing and selling of securities?
Who is responsible for making decisions about increasing and decreasing the supply of money through the purchasing and selling of securities?
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What is money that the law says must be accepted?
What is money that the law says must be accepted?
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What does the government have when its spending exceeds its tax receipts?
What does the government have when its spending exceeds its tax receipts?
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What is another name for the sum of all goods and services produced by business firms and sold to final consumers?
What is another name for the sum of all goods and services produced by business firms and sold to final consumers?
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What is a money policy that reduces the money supply?
What is a money policy that reduces the money supply?
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What occurs when account holders of a bank empty out their accounts by coming to the bank or making online transfers?
What occurs when account holders of a bank empty out their accounts by coming to the bank or making online transfers?
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How many Federal Reserve Districts does the nation have?
How many Federal Reserve Districts does the nation have?
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What is the nickname for the central bank of the US?
What is the nickname for the central bank of the US?
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What forces commercial banks to hold a specified percentage of each deposit?
What forces commercial banks to hold a specified percentage of each deposit?
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What are actions of the Federal Reserve Bank that change the money supply?
What are actions of the Federal Reserve Bank that change the money supply?
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What is the attempt to keep the money supply growing at the same rate as the growth of the nation's production of goods and services to avoid what?
What is the attempt to keep the money supply growing at the same rate as the growth of the nation's production of goods and services to avoid what?
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The Federal Reserve controls the money supply by influencing which rate?
The Federal Reserve controls the money supply by influencing which rate?
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What is a period of very rapid inflation, such as that experienced in post-World War 1 Germany?
What is a period of very rapid inflation, such as that experienced in post-World War 1 Germany?
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Who benefits from inflation?
Who benefits from inflation?
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Who is hurt by inflation?
Who is hurt by inflation?
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What is an example of a measure of value?
What is an example of a measure of value?
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What is an example of means of storing purchasing power?
What is an example of means of storing purchasing power?
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What is an example of means of payment?
What is an example of means of payment?
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Who is the current chair of the Federal Reserve Bank?
Who is the current chair of the Federal Reserve Bank?
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What type of support comes after people have their basic needs for food and shelter provided and helps people get back to where they were before a crisis occurred in their lives?
What type of support comes after people have their basic needs for food and shelter provided and helps people get back to where they were before a crisis occurred in their lives?
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What is an example of a soft skill?
What is an example of a soft skill?
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What is one of the advantages of support-raising missionaries compared to tent-making?
What is one of the advantages of support-raising missionaries compared to tent-making?
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What percentage of GDP is from government spending in 2014?
What percentage of GDP is from government spending in 2014?
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What is a reason for trade deficits?
What is a reason for trade deficits?
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Who articulated the principle of comparative advantage, contrary to British trade policy protecting domestic industry with protective tariffs?
Who articulated the principle of comparative advantage, contrary to British trade policy protecting domestic industry with protective tariffs?
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Which part of the business cycle has the unemployment rate reaching its lowest point?
Which part of the business cycle has the unemployment rate reaching its lowest point?
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How is the unemployment rate figured?
How is the unemployment rate figured?
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Study Notes
Economics Key Terms & Concepts
- Equilibrium Price: The price where buyers and sellers agree.
- Opportunity Cost: The value of the next best alternative forgone when making a choice (e.g., choosing to volunteer over a summer job).
- Microeconomics: The study of choices about wealth made by individuals, households, and businesses.
- Macroeconomics: The study of large-scale choices about wealth.
- Normative Economics: Statements of opinion or what should happen (rather than what does happen).
- Water Paradox: Water, according to Menger, can be worth more than diamonds, as its usefulness outweighs its abundance.
- Insurance Premium: The monthly payment for an insurance policy.
- Deductible: The portion of an insurance claim a policyholder must pay.
- Beneficiary: The individual who receives payment from a life insurance policy.
- Austrian School: An economic school of thought emphasizing a free-market, private property system with a limited government role.
- Macroeconomics Question Example: "What is the inflation rate in the US?"
- Most Important Factor of Production: Entrepreneurship
- Law of Demand: As the price of a good falls, the quantity demanded rises (all other things being equal).
- Complementary Goods Example (Batteries & Radios): A decrease in battery prices increases the demand for portable radios.
- Adam Smith's 1776 Work: The Wealth of Nations.
- Ephesians 4:28: Those who have stolen must steal no longer, but must work, doing something useful with their own hands, that they may have something to share with those in need.
- Most Popular Business Model in the US: Sole Proprietorship.
- Corporation Characteristics: Individuality and immortality, potentially taxed twice on earnings.
- S Corporation Limitation: Less than 35 shareholders.
- Creditor: A person or entity lending money and holding a debt.
- Limited Partner: Investor with limited liability and few duties.
- Cosigner: Someone who agrees to pay back a loan if the borrower defaults.
- IPO (Initial Public Offering): A corporation's first stock sale.
- DJIA (Dow Jones Industrial Average): A critical health indicator for American industry.
- Common Stock: The most prevalent type of stock.
- Bull Market Symbol: A rising market.
- Mutual Funds: Privately managed stock portfolios.
- Dividend: A portion of a company's profit distribution.
- Sole Proprietorship/Partnership Risk: Unlimited financial liability.
- J.C. Penny's Philosophy: "Do unto others as you would have them do unto you".
- Corporation Market Response: Slower response to market changes compared to a partnership.
- Corporation Loans: Corporations can generally obtain better loans than partnerships.
- Stock Representation: Partial ownership of a company.
- Corporation Bankruptcy Order of Payment: Common shareholders receive payment last in case of bankruptcy.
- Stock Index Purpose: Identifying industry trends.
- Wall Street Journal Founders: Charles Dow and Edward Jones.
- IPO Stock Holding: Original owners often retain a majority of the company's stock.
- Perfect Competition Characteristics: Easy entry/exit, undifferentiated products.
- Artificial Barriers to Entry: Paperwork for permits and licenses.
- John D. Rockefeller's Accomplishments: Emphasis on integrity, philanthropy.
- Fiat Money: Money backed by nothing of value.
- Representative Money: Money backed by a commodity (like gold or silver).
- Interest: Payment for using financial capital.
- Inflation: Increase in circulating money causing devaluation.
- FDIC (Federal Deposit Insurance Corporation): Insurer of bank deposits.
- FOMC (Federal Open Market Committee): Controls the money supply.
- Legal Tender: Money that the law requires to be accepted.
- Government Deficit: When spending exceeds tax receipts.
- GDP (Gross Domestic Product): Sum of all goods and services sold to final consumers.
- Tight Monetary Policy: Decreases the money supply.
- Bank Run: Account holders withdrawing funds en masse.
- Federal Reserve Districts: 12 districts.
- Federal Reserve Nickname: The Fed.
- Reserve Requirement: Percentage of each deposit that banks must hold.
- Monetary Policy: Actions of the Federal Reserve that change the money supply.
- Money Supply Growth & Inflation: Keeping the money supply growing at the same rate as production to avoid inflation.
- Interest Rate and Money Supply Control: The Federal Reserve influences interest rates to control the money supply.
- Hyperinflation: Rapid inflation, such as in post-WWI Germany.
- Inflation Beneficiary/Victim: Borrowers benefit, elderly hurt.
- Money as a Measure of Value: A relative comparison of value.
- Money as Storing Purchasing Power: Saving money to maintain its value over time.
- Money as Payment: Facilitating transactions.
- Current Federal Reserve Chair: Jerome Powell.
- Rehabilitation Support: Assistance after basic needs are met to restore pre-crisis levels.
- Soft Skill Example: Reliability.
- Support-Raising Missionaries Advantage: Concentration on a specific purpose (e.g., Bible translation).
- 2014 Government Spending Percentage of GDP: 20%
- Trade Deficit Reasons: Better quality of foreign goods.
- Comparative Advantage Advocate: Ricardo.
- Unemployed Rate Lowest Point: Business Cycle Peak.
- Calculating Unemployment Rate: Unemployed people divided by total labor force.
- Structural Unemployment: Lack of skills for new equipment.
- Minimum Wage Increase Effect: Fewer workers demanded.
- Smooth-Hawley Tariffs: U.S. tariffs in the 1930s that hindered global trade and worsened the Great Depression.
- NAFTA (North American Free Trade Agreement): Free-trade zone between Canada, Mexico, and the U.S.
- Paternalism: Doing things for people that they can do for themselves.
- Import Quotas: Limitations on imported goods.
- Subsidies: Government payments for businesses to lower product prices (domestic/international).
- Protectionists: Supporters of government regulations and taxes on foreign products.
- GATT (General Agreement on Tariffs and Trade): Agreement minimizing trade barriers among nations.
- Real GDP: GDP adjusted for inflation.
- Recession: Two consecutive quarters (six months) of declining real GDP.
- Capital Goods: Equipment used for producing goods.
- Communist Manifesto Principle: "From each according to his ability, to each according to his need."
- Consumer Goods: Items bought for personal use.
- Fairness Views: Libertarian (productivity-based distribution) vs. Egalitarian (equality-based distribution).
- Economic Systems: Capitalism (private ownership/decision-making), Socialism (central authority control), Communism (no government required).
- Nationalization/Privatization: Government acquisition/transfer of industries.
- National Economic Goal: Healthy rate of economic growth.
- Safety-Net Egalitarianism: Supporting economic assistance programs.
- Laissez-faire: "Let alone" (minimal government intervention).
- Adam Smith's Baker Motive: Self-interest drives economic activity.
- Characteristic of Capitalism: Individuals primarily own factors of production.
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Description
Test your knowledge of essential economics terms and concepts with this quiz. From equilibrium price to the Austrian school, each question will challenge your understanding of fundamental economic principles. Perfect for students and enthusiasts alike!
