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Economics Semester Review Flashcards | StudBud
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Economics Semester Review
Economics Semester Review
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1
What happens when consumers and households spend less money?
There is an increase in wages.
Businesses make more profit.
It leads to more GDP, higher inflation, and lower unemployment
It leads to lower GDP, lower inflation and more unemployment.
2
The Law of Demand states that when price increases quantity demanded decreases.
True
False
3
In economic terms, what is the problem with producing at Q2?
The Marginal Benefit is EQUAL TO the Marginal Cost
The Marginal Benefit is GREATER THAN the Marginal Cost
The Marginal Cost is GREATER THAN the Marginal Benefit
4
What happens when a price ceiling is placed on a market?
Surplus
Increase in supply
Increase in demand
Shortage
5
You are concerned that your job may cause you to have a lifelong injury; which insurance should you buy?
disability insurance
Health insurance
auto insurance
life insurance
6
What is a business with one owner that has unlimited personal liability?
Franchise
Sole Proprietorship
Corporation
Partnership
7
When the price of milk increases, what happens to the demand for cookies?
It doesn't matter.
It stays the same
It increases.
It decreases
8
What economic system did Karl Marx influence?
Capitalism
The Centrally Planned Economy
Traditional Economy
Free Market Economy
9
What are the factors of production?
Land, Labor, Capital, Entrepreneurship
God, Gold, Glory
Land, businesses, money.
Labor, Money, Profit, Revenue.
10
What is the result of a hurricane in Florida on the gasoline market?
it will cause a surplus
It will causes a shortage
11
When countries trade without barriers, what usually happens to the citizens of the country?
More access to resources and goods that they don't produce themselves.
There is more equal distribution of wealth
More war happens
The government suffers
12
What is the benefit of owning a corporation?
Unlimited personal liability
less government oversight.
It is easy to start and easy to end.
Limited personal liability
13
What type of unemployment is caused by robots replacing workers?
Seasonal Unemployment
Frictional Unemployment
Structural Unemployment
Cyclical Unemployment
14
What happens to a good's price when a good is in a shortage?
Price stays the same
Price increases and decreases at the same time
Price decreases
Price increases
15
Which of these is a business that is owned by many shareholders that have limited liability?
Partnership
Franchise
Corporation
Sole Proprietorship
16
Which of these is a tool by the Federal Reserve?
changing interest rates
the discount rate
spending on public roads and bridges
changing income taxes
17
What type of unemployment is caused by workers quitting to find new jobs?
Seasonal Unemployment
Cyclical Unemployment
Frictional Unemployment
Structural Unemployment
18
Which of these is a tool of fiscal policy?
spending on public roads and bridges
changing income taxes
changing interest rates
the discount rate
19
You invite your friends over for a birthday party and one of them gets injured on a trampoline; which insurance?
Cell Phone Insurance
Auto Insurance
Homeowners Insurance
Health Insurance
20
Which of these has the absolute lowest risk and return?
certificates of deposit
bonds
stocks
savings accounts
21
What are some of Adam Smith's key ideas?
The government needs to be actively involved in fixing the economy.
The proletariat are exploited so they will overthrow the bourgeoisie.
Government must control all aspects of production.
The government should take a laissez faire (invisible hand) approach.
22
What should the government (fiscal policy) do during a recession?
Increase spending and decrease taxes.
lower interest rates.
decrease spending and increase taxes.
raise interest rates
23
What was Karl Marx's critique of the free market (capitalism)?
That the free market is the best way to run an economy.
workers make all of the money but get none of the profit
That the government has too much power.
That recessions occur too much.
24
The law of supply states:
when price increases quantity supplied decreases
when price increases quantity demanded increases
when price increases quantity supplied increases
when price increases quantity demanded decreases
25
Free trade like NAFTA and the European Union
Benefits consumers but can hurt workers
hurts consumers and workers
It a bad policy and should be abolished.
hurts consumers but helps workers
26
When the price of milk increases, what happens to the demand of milk?
It doesn't matter.
It stays the same
It increases.
It decreases
27
What economy most closely resembles the ideas of Adam Smith?
Centrally Planned Economy (Socialism)
Free Market (Capitalism)
Traditional Economy
Mixed Economy
28
Who answers What To Produce, How to Produce, and For Whom to Produce in the free market?
The Government
Consumers and Producers
Habit, Ritual, and Custom
29
What is a better long term investment?
A brand new Honda Pilot
Renting a house
Meme Stocks
Purchasing a House
30
What is the result of the implementation of a price floor?
It creates a surplus because Qs is greater than Qd
It creates a surplus because Qd is greater than Qs
It creates a shortage because Qd is greater than Qs
It creates a shortage because the Qs is greater than Qd
31
How much should a society produce?
Q1
Q*
Q3
At point A
32
What are the two most important factors of a credit score?
Payment History
Newest Account
Credit Mix
Credit Utilization/Usage
33
What motivates businesses to be great in a free enterprise system?
Consumers do what they want
Government intervention
Profit incentive
Habits, rituals and customs force businesses to be better.
34
What happens when a populations wants and needs exceed its resources?
Falling prices
Surpluses
Shortages
decreases in demand
35
What type of unemployment is caused by recessions?
Structural Unemployment
Frictional Unemployment
Cyclical Unemployment
Seasonal Unemployment
36
What happens to GDP, Unemployment and Price Level when the government spends money to fix a recession?
GDP Decreases, Unemployment Increases, and Price Level Decreases.
GDP Increases, Unemployment Decreases, and Prices Increase.
Nothing happens, the economy fixes itself.
37
What happens to price and quantity when the government breaks up a monopoly.
Price Increases and Quantity Decreases
Price Increases and Quantity Increase
Price Decreases and Quantity Increases
Price Decreases and Quantity Decreases
38
What is Human Capital
Machines and Tools
Knowledge and Skills
Natural Resources
Business Owners
39
What is Physical Capital
Machines and Tools
Knowledge and Skills
Business Owners
Natural Resources
40
How should we save our money for emergencies?
Once every couple months.
In small incremements consistently each month.
What Save??? YOLO
Buy bitcoin and GME
41
What is the key problem of economics
There are limited wants and unlimited resources
The rich get richer and the poor get poorer
There are unlimited wants and limited resources
Managing money is difficult
42
Which of these has the highest risk and return?
stocks
savings accounts
bonds
certificates of deposit
43
What is an optimal inflation, unemployment rate, and GDP Growth Rate?
Inflation -5% Unemployment 35% GDP -30%
Inflation 10% Unemployment 1% GDP 8%
Inflation 1% Unemployment 10% GDP -10%
Inflation 2-3% Unemployment 3-5% GDP 2-3%
