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Honors Economics Unit 3: Government and the Economy Flashcards | StudBud
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Honors Economics Unit 3: Government and the Economy
Honors Economics Unit 3: Government and the Economy
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1
In an absolute free-market economy, decisions about the production of goods are services are made by:
a combination of private and public enterprise.
individual producers and consumers.
a dictatorship.
an elected government.
2
Which economic goal is being emphasized when goods and services are distributed evenly?
Equity
Freedom
Growth
Stability
3
Which of the following is an economic cost of high unemployment?
inflation
increasing nominal GDP
increased income tax revenues
decreasing real GDP
4
What is an example of the American government redistributing income?
Providing social welfare such as Social Security and Medicaid
Subsidizing Covid vaccine clinics
Protecting workers against hazardous condition
Recalling faulty and dangerous products
5
The United States has a _________ economy.
mixed
command
market
socialist
6
What is an example of the American government stabilizing the economy?
Punishing an oligopoly for fixing prices
Giving food stamps (an EBT card) to a financially struggling family
Lowering the interest rate to encourage borrowing
Protecting consumers against false advertising
7
What is an example of the American government maintaining competition in markets?
Passing laws to cut carbon emissions
Raising taxes on the highest-income Americans
Building roads and bridges
Stopping corporate mergers to avoid monopolies
8
Which economic goal is being emphasized when the prices for essential goods and services remain predictable?
Efficiency
Freedom
Stability
Growth
9
A decline in economic activity over a period of at least six months (two quarters) is called a:
panic
contraction
recession
expansion
10
What is a defining feature of socialism?
Complete lack of profit motive
Complete government control over production
Entirely private ownership over production
Collective ownership over major forms of production
11
Which of the following is not considered an ESSENTIAL question that a society must answer about its economy?
How should it be distributed?
What should be produced?
How much should goods and services cost?
How should it be produced?
12
What is a defining feature of communism?
Strong profit motive
Many private property rights
Classless society and equal distribution of wealth
No social welfare
13
What is an inflation rate?
Percentage increase in prices of goods and services over time
Percentage of labor force that is not employed but is actively seeking work
An arrangement that brings buyers and sellers together to do business
A recurring pattern of growth and decline in economic activity over time
14
What are economic indicators?
Knowledge and skill that people gain from education and other experiences
Anything used to produce an economic good or service
The study of the economy at the level of households and businesses
Statistics that help economists judge the health of an economy
15
What is a defining feature of capitalism?
Lack of profit motive
Private property
Central planning
Social welfare
16
Which economic goal is being emphasized when assistance is provided for struggling individuals?
Efficiency
Security
Stability
Growth
17
What is an example of the American government maintaining a legal framework for economic purposes?
Funding social welfare programs
Protecting private property rights
Raising the interest rate
Building public parks
18
Why does the government accept that there will always be some unemployed workers?
Most workers do not have enough training for the best jobs.
There are always some people in transition between jobs.
Most jobs lay off workers when the economy slows.
There are never enough jobs for everyone who wants one.
19
In a command economy, decisions about the production of goods are services are made by:
the central government.
a powerful group of private firms.
individual producers and consumers.
a combination of private and public enterprise.
20
The market value of all final goods and services produced within a country in a given time period is the:
wage-price spiral
GDP
unemployment rate
inflation rate
21
What is an example of the American government providing public goods and services?
Having police and fire departments
Establishing a monetary system
Taxing the sale of tobacco and alcohol
Regulating the bank system
22
Which economic goal is being emphasized when individuals are given the choice to make their own economic decisions?
Growth
Security
Freedom
Efficiency
23
Which economic goal is being emphasized when people seek to eliminate waste (because resources are scarce)?
Growth
Security
Efficiency
Freedom
24
What is the wage-price spiral?
When higher wages lead to unemployment
When higher prices lead to lower wages
When higher wages lead to businesses closing
When higher prices lead to higher wages, which lead to even higher prices
