Economics Terminology Quiz

Economy: a system of production, distribution, and consumption of goods and services
Consumer: an individual who buys and uses goods and services
Producer: an individual or business that creates goods and services
Market Economy: an economy where resources are allocated based on market forces of supply and demand
Profit: the difference between revenue and costs
Incentive: a motivation to take action
Competition: the rivalry between producers to sell goods and services
Supply: the amount of goods and services producers are willing to sell
Demand: the amount of goods and services consumers are willing to buy
Opportunity Cost: the value of the next best alternative given up when choosing one option over another
Scarcity: the fundamental economic problem of limited resources and unlimited wants

Bond: a type of investment where an investor lends money to a borrower
Interest Rate: the percentage of the loan amount charged as interest
Credit: the ability to borrow money
Credit Reporting Bureaus: organizations that collect and provide credit information
Credit Counseling: services that help individuals manage debt
Money: a medium of exchange, unit of account, and store of value
Currency: the physical form of money
Deposits: money placed into a bank account
Withdrawals: money taken out of a bank account
Checking Account: a type of bank account for everyday transactions
Savings Account: a type of bank account for saving money
Checks: written orders to pay a specified amount of money
Debit Card: a card that deducts money directly from a bank account
Loan: a type of credit where money is borrowed and repaid with interest
Budget: a plan for managing income and expenses
Federal Budget: the budget of the federal government
Mandatory Spending: government spending required by law
Discretionary Spending: government spending that can be changed by Congress
Securities: financial instruments representing ownership or debt
Interest: a fee charged on borrowed money
Deficit: a shortfall in a budget or financial situation
Surplus: an excess in a budget or financial situation

Federal Reserve: the central bank of the United States
Inflation: a sustained increase in the general price level of goods and services
Investment: the act of putting money into something with the expectation of earning a profit
Credit Score: a numerical representation of creditworthiness
Consumer Sovereignty: the idea that consumers have the power to make choices in a market economy
Private Property Rights: the rights of individuals to own and control property
Laissez-Faire: an economic philosophy that advocates for minimal government intervention
Tax: a compulsory payment to the government
Excise Tax: a tax on specific goods and services
Income Tax: a tax on an individual's income
Corporate Income Tax: a tax on a corporation's income
Progressive Tax: a tax where higher incomes are taxed at a higher rate
Social Security Tax: a tax to fund Social Security programs
Property Tax: a tax on real estate and personal property
Estate Tax: a tax on inherited property
Tariffs: taxes on imported goods

How do banks earn a profit?: Banks earn a profit by lending money at a higher interest rate than they borrow at.
What is a credit score?: A credit score is a numerical representation of creditworthiness.
What are the advantages of credit/loans?: Credit and loans allow individuals and businesses to finance purchases and investments.
What are the disadvantages of credit/loans?: Debt can lead to financial difficulties if not managed properly.
What happens if you cannot pay back a loan?: Failure to repay a loan can result in late fees, penalties, and damage to credit scores.

Functions of the Federal Reserve: regulating and supervising banks, maintaining the stability of the financial system, and setting monetary policy.
How does the Federal Reserve moderate the economy?: The Federal Reserve sets interest rates and regulates the money supply to promote economic growth and stability.
Why would the Federal Reserve want interest rates raised or lowered?: To control inflation, stimulate economic growth, or combat recession.

How do federal, state, and local taxes support the economy and provide services to citizens?: Taxes fund public goods and services, such as infrastructure, education, and national defense.
Federal Budget: a plan for managing the federal government's income and expenses.
Government borrowing: the government borrows money by issuing bonds and securities.
Government's 5 roles in a market economy: provider of public goods, regulator, stabilizer, allocator of resources, and protector of individual rights.

What are the 3 basic economic questions?: What to produce, how to produce, and for whom to produce.
What are the 6 characteristics of money?: medium of exchange, unit of account, store of value, standard of deferred payment, divisibility, and portability.
What is the Constitution?: The supreme law of the United States, outlining the structure and powers of the federal government.
What are the three parts of the Constitution?: the Preamble, the Articles, and the Amendments.
What are the 7 Articles of the Constitution?: Article I: Legislative Branch, Article II: Executive Branch, Article III: Judicial Branch, Article IV: States, Article V: Amendments, Article VI: Debts, Article VII: Ratification.

Who are the three philosophers associated with the Constitution?: John Locke, Thomas Hobbes, and Baron de Montesquieu.
How did John Calvin influence the Constitution?: Calvin's ideas on governance and the social contract influenced the Constitution.
How did Thomas Hobbes influence the Constitution?: Hobbes' ideas on the social contract and the role of government influenced the Constitution.
How did Baron de Montesquieu influence the Constitution?: Montesquieu's ideas on separation of powers and checks and balances influenced the Constitution.

What is the Bill of Rights?: The first 10 amendments to the Constitution, protecting individual rights and liberties.
What is the primary purpose of the Bill of Rights?: To protect individual rights and liberties from government abuse.
Who authored the Bill of Rights?: James Madison.
How many rights were originally proposed?: 19 rights were originally proposed, but 10 were ratified.

What are the 13th, 14th, 15th, 19th, 24th, and 26th amendments for?: Abolishing slavery, granting citizenship, voting rights, women's suffrage, poll taxes, and voting age, respectively.

Note: This is not an exhaustive list of study notes, but rather a condensed version of the key terms and concepts.