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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 is an optimal inflation, unemployment rate, and GDP Growth Rate?
Inflation 10% Unemployment 1% GDP 8%
Inflation 1% Unemployment 10% GDP -10%
Inflation -5% Unemployment 35% GDP -30%
Inflation 2-3% Unemployment 3-5% GDP 2-3%
2
What is Physical Capital
Natural Resources
Knowledge and Skills
Machines and Tools
Business Owners
3
When the price of milk increases, what happens to the demand of milk?
It doesn't matter.
It increases.
It stays the same
It decreases
4
What type of unemployment is caused by robots replacing workers?
Frictional Unemployment
Seasonal Unemployment
Structural Unemployment
Cyclical Unemployment
5
What happens when a price ceiling is placed on a market?
Increase in supply
Surplus
Increase in demand
Shortage
6
Which of these has the highest risk and return?
certificates of deposit
savings accounts
bonds
stocks
7
What type of unemployment is caused by workers quitting to find new jobs?
Seasonal Unemployment
Cyclical Unemployment
Frictional Unemployment
Structural Unemployment
8
When countries trade without barriers, what usually happens to the citizens of the country?
More war happens
More access to resources and goods that they don't produce themselves.
The government suffers
There is more equal distribution of wealth
9
What motivates businesses to be great in a free enterprise system?
Consumers do what they want
Profit incentive
Habits, rituals and customs force businesses to be better.
Government intervention
10
How should we save our money for emergencies?
Buy bitcoin and GME
In small incremements consistently each month.
What Save??? YOLO
Once every couple months.
11
What is a better long term investment?
Purchasing a House
A brand new Honda Pilot
Meme Stocks
Renting a house
12
What happens to a good's price when a good is in a shortage?
Price stays the same
Price increases
Price decreases
Price increases and decreases at the same time
13
Which of these is a tool by the Federal Reserve?
spending on public roads and bridges
changing interest rates
changing income taxes
the discount rate
14
What is Human Capital
Knowledge and Skills
Natural Resources
Machines and Tools
Business Owners
15
What was Karl Marx's critique of the free market (capitalism)?
That recessions occur too much.
workers make all of the money but get none of the profit
That the government has too much power.
That the free market is the best way to run an economy.
16
What should the government (fiscal policy) do during a recession?
decrease spending and increase taxes.
lower interest rates.
raise interest rates
Increase spending and decrease taxes.
17
What is a business with one owner that has unlimited personal liability?
Franchise
Partnership
Sole Proprietorship
Corporation
18
Which of these is a business that is owned by many shareholders that have limited liability?
Partnership
Corporation
Franchise
Sole Proprietorship
19
What happens to price and quantity when the government breaks up a monopoly.
Price Increases and Quantity Decreases
Price Decreases and Quantity Decreases
Price Decreases and Quantity Increases
Price Increases and Quantity Increase
20
How much should a society produce?
At point A
Q*
Q1
Q3
21
You are concerned that your job may cause you to have a lifelong injury; which insurance should you buy?
disability insurance
auto insurance
Health insurance
life insurance
22
What are the two most important factors of a credit score?
Payment History
Credit Utilization/Usage
Newest Account
Credit Mix
23
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
24
The Law of Demand states that when price increases quantity demanded decreases.
False
True
25
You invite your friends over for a birthday party and one of them gets injured on a trampoline; which insurance?
Health Insurance
Auto Insurance
Cell Phone Insurance
Homeowners Insurance
26
In economic terms, what is the problem with producing at Q2?
The Marginal Cost is GREATER THAN the Marginal Benefit
The Marginal Benefit is GREATER THAN the Marginal Cost
The Marginal Benefit is EQUAL TO the Marginal Cost
27
What happens when a populations wants and needs exceed its resources?
Falling prices
Surpluses
Shortages
decreases in demand
28
Free trade like NAFTA and the European Union
hurts consumers and workers
Benefits consumers but can hurt workers
It a bad policy and should be abolished.
hurts consumers but helps workers
29
Which of these is a tool of fiscal policy?
changing interest rates
changing income taxes
spending on public roads and bridges
the discount rate
30
The law of supply states:
when price increases quantity demanded decreases
when price increases quantity supplied increases
when price increases quantity supplied decreases
when price increases quantity demanded increases
31
What happens when consumers and households spend less money?
It leads to more GDP, higher inflation, and lower unemployment
Businesses make more profit.
It leads to lower GDP, lower inflation and more unemployment.
There is an increase in wages.
32
What economy most closely resembles the ideas of Adam Smith?
Free Market (Capitalism)
Traditional Economy
Centrally Planned Economy (Socialism)
Mixed Economy
33
What are the factors of production?
Land, businesses, money.
Land, Labor, Capital, Entrepreneurship
Labor, Money, Profit, Revenue.
God, Gold, Glory
34
What economic system did Karl Marx influence?
Traditional Economy
Free Market Economy
Capitalism
The Centrally Planned Economy
35
Who answers What To Produce, How to Produce, and For Whom to Produce in the free market?
Habit, Ritual, and Custom
The Government
Consumers and Producers
36
What is the key problem of economics
The rich get richer and the poor get poorer
There are unlimited wants and limited resources
There are limited wants and unlimited resources
Managing money is difficult
37
What are some of Adam Smith's key ideas?
The government needs to be actively involved in fixing the economy.
The government should take a laissez faire (invisible hand) approach.
The proletariat are exploited so they will overthrow the bourgeoisie.
Government must control all aspects of production.
38
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.
39
Which of these has the absolute lowest risk and return?
certificates of deposit
stocks
bonds
savings accounts
40
When the price of milk increases, what happens to the demand for cookies?
It increases.
It stays the same
It decreases
It doesn't matter.
41
What is the result of a hurricane in Florida on the gasoline market?
it will cause a surplus
It will causes a shortage
42
What is the result of the implementation of a price floor?
It creates a surplus because Qd is greater than Qs
It creates a surplus because Qs is greater than Qd
It creates a shortage because the Qs is greater than Qd
It creates a shortage because Qd is greater than Qs
43
What type of unemployment is caused by recessions?
Cyclical Unemployment
Structural Unemployment
Seasonal Unemployment
Frictional Unemployment
