Economics Study Guide PDF

Economics: Study Guide Name _____________________________________ Date ________________ Period _______ 1. A change in the number of units supplied at every price is called change in supply. 2. A maximum price set by government that is below the market...

Economics: Study Guide Name _____________________________________ Date ________________ Period _______ 1. A change in the number of units supplied at every price is called change in supply. 2. A maximum price set by government that is below the market equilibrium price is known as price ceiling. 3. A minimum price set by government that is above the market equilibrium price is known as price floor. 4. A persistent trade deficit causes unemployment to increase in import industries. 5. According to the law of demand at lower prices we will buy more of an item at higher prices we will buy less. 6. An act of Congress that allows federal agencies to spend money for specific purposes is an appropriations bill. 7. An advantage of flexible exchange rates is that trade deficits tend to automatically correct themselves. 8. Annual plan outlining proposed revenues and expenditures for the coming year is defined as the federal budg- et. 9. Anything used to produce a good or service is called factors of production. 10. Balanced budget amendment is a constitutional amendment requiring that annual spending not exceed reve- nues. 11. Broad social programs for eligible individuals are described as entitlement. 12. Collective bargaining generally occurs first in union-management negotiations. 13. Condition in which the quantity supplied is greater than the quantity demanded at a certain price is known as surplus. 14. Congress didn’t pass the Smoot-Hawley Tariff in 1930 nor successfully protected U.S. industry while increas- ing trade. 15. Dealing fairly and equally with all concerned is called equity. 16. Elementary and secondary education is the major spending responsibility of local governments. 17. Entrepreneurship can be defined as the managerial ability and risk taking that contribute so much to a produc- tive economy. 18. Federal debt is the amount borrowed to finance deficit spending. 19. fiscal year is described as a 12-month financial planning period that may or may not coincide with the calen- dar year 20. Free traders favor few or even no trade restrictions. 21. Free traders never argue that new or emerging industries should be protected from foreign competition. 22. Goods for which demand goes down as income goes up are described as inferior goods. 23. Goods for which demand goes up as income goes up are known as normal goods. 24. Health inspections on food products limit trade between nations. 25. Higher-than-normal interest rates that are caused by heavy government borrowing are described as crowding- out effect. 26. In a modified union shop, workers do not have to belong to a union to be hired and cannot be made to join one to keep their jobs. 27. In a union shop type of union a woman would join a package shipping firm as a truck driver. She would re- quired to join the labor union six weeks after she starts work, and she must remain a member. 28. Insurance trust funds can be described as state funds invested for use when people retire, become unemployed, or are injured on the job. 29. Interest on debt are described as costs incurred by both state and local governments for borrowing money. 30. Intergovernmental expenditures is the largest category of state spending. 31. Labor mobility refers to the ability and willingness of workers to relocate in markets where wages are higher. 32. Land can be described as a broad measure representing all the basic natural resources that contribute to pro- duction. 33. Little job security, low pay, and poor working conditions were factors that helped give rise to unions. 34. Macroeconomics can be defined as the branch of economics that examines the behavior of the whole economy at once. 35. One effect of tariffs and quotas is higher prices on domestic products. 36. Payments made to others as a cost of running a business are called explicit costs. 37. Programs that must receive annual authorization are known to be part of discretionary spending. 38. Protectionists argue that trade barriers keep a nation from becoming too dependent on other countries. 39. Regional differences in wage rates are influenced by cost of living, labor mobility, and location. 40. Revenue tariffs are levied to raise money. 41. Right-to-work laws prohibit mandatory union membership. 42. Ruling out aspects of a problem that seem important only because of your strong emotions about them can be defined as objectivity. 43. Social Economy is an economy in which the major economic questions are determined by a government rep- resenting the interests of the entire society. 44. Spending authorized by law that continues without the need for annual approvals of Congress is called manda- tory spending. 45. Spending in excess of revenues collected is called deficit spending. 46. Tariffs and quotas reduce trade deficits, increase prices consumers pay for goods and protect domestic indus- try. 47. The benefits received by a society from a social choice are known as social benefits. 48. The branch of economics that examines the choices of individuals concerning one product, one firm, or one industry is known as microeconomics. 49. The change in the mix of goods purchased as a result of increasing or decreasing relative prices is known as substitution effect. 50. The characteristics of a group of alternatives that will be judged to make a choice is called a criteria. 51. The combination of social and individual decision making a society uses to answer the three economic ques- tions is known as economic system. 52. The condition that occurs because people’s wants and needs are unlimited, while the resources needed to pro- duce goods and services to meet these wants and needs are limited is known as scarcity. 53. The decisions made by people acting separately is known as individual choice. 54. The difference between the money you obtain from selling a product and the cost of producing the product is called economic profit. 55. The foreign exchange rate is the price of one country's currency in terms of another country's currency. 56. The goals of an entire society can be defined as social goals. 57. The Great Depression turned popular opinion in favor of unions. 58. The international agency that administers trade agreements and settles trade disputes is WTO. 59. The Law of Supply states that quantity of goods supplied will be greater at a higher price than it will at lower price. 60. The mix of goods that can be purchased with a limited amount of income is known as budget constraint. 61. The National Labor Relations Board was created by the Wagner Act. 62. The North American Free Trade Agreement has resulted in gaining many American jobs and an increase in trade. 63. The process of choosing which needs will be satisfied and how much of our resources we will use to satisfy them is called allocation. 64. The Smoot-Hawley Tariff of 1930 resulted in the highest tariff rates in U.S. history. 65. The theory of equilibrium wage rate is not a theory used to explain differences in wages. 66. The traditional theory of wage determination holds that differences in wage rates can be explained by supply and demand. 67. The unit of measurement for utility is called util. 68. The wage theory that states that differences in wage rates are determined by collective bargaining is the theory of negotiated wages. 69. Trust funds are accounts used to fund types of expenditures. 70. Unions are important in today's economy because they played a major role in promoting legislation and affect- ing wages today. 71. Unions use methods such as boycotts, picketing and strikes. 72. We refer to all the units of a product produced in a given period of time as total product. 73. We refer to the total amount of money a company receives from sales of a product as total revenue. 74. When labor and management bring in a neutral third party to help settle a dispute, they are resolving their dif- ferences through mediation. 75. When President Nixon refused to redeem foreign-held dollars for gold in 1971, the world went from a fixed exchange rate to a floating exchange rate.