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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 type of unemployment is caused by robots replacing workers?
Cyclical Unemployment
Structural Unemployment
Frictional Unemployment
Seasonal Unemployment
2
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.
The government suffers
There is more equal distribution of wealth
More war happens
3
What type of unemployment is caused by workers quitting to find new jobs?
Frictional Unemployment
Structural Unemployment
Seasonal Unemployment
Cyclical Unemployment
4
Who answers What To Produce, How to Produce, and For Whom to Produce in the free market?
Consumers and Producers
The Government
Habit, Ritual, and Custom
5
What happens when a price ceiling is placed on a market?
Shortage
Surplus
Increase in demand
Increase in supply
6
What is the benefit of owning a corporation?
Limited personal liability
less government oversight.
Unlimited personal liability
It is easy to start and easy to end.
7
What are the factors of production?
Land, Labor, Capital, Entrepreneurship
God, Gold, Glory
Land, businesses, money.
Labor, Money, Profit, Revenue.
8
What type of unemployment is caused by recessions?
Seasonal Unemployment
Cyclical Unemployment
Frictional Unemployment
Structural Unemployment
9
What happens when consumers and households spend less money?
Businesses make more profit.
It leads to more GDP, higher inflation, and lower unemployment
There is an increase in wages.
It leads to lower GDP, lower inflation and more unemployment.
10
What motivates businesses to be great in a free enterprise system?
Government intervention
Profit incentive
Consumers do what they want
Habits, rituals and customs force businesses to be better.
11
What is the result of a hurricane in Florida on the gasoline market?
It will causes a shortage
it will cause a surplus
12
What happens to a good's price when a good is in a shortage?
Price decreases
Price increases
Price increases and decreases at the same time
Price stays the same
13
When the price of milk increases, what happens to the demand of milk?
It increases.
It decreases
It stays the same
It doesn't matter.
14
You invite your friends over for a birthday party and one of them gets injured on a trampoline; which insurance?
Auto Insurance
Health Insurance
Cell Phone Insurance
Homeowners Insurance
15
Free trade like NAFTA and the European Union
Benefits consumers but can hurt workers
hurts consumers but helps workers
hurts consumers and workers
It a bad policy and should be abolished.
16
In economic terms, what is the problem with producing at Q2?
The Marginal Cost is GREATER THAN the Marginal Benefit
The Marginal Benefit is EQUAL TO the Marginal Cost
The Marginal Benefit is GREATER THAN the Marginal Cost
17
The Law of Demand states that when price increases quantity demanded decreases.
False
True
18
What should the government (fiscal policy) do during a recession?
raise interest rates
decrease spending and increase taxes.
lower interest rates.
Increase spending and decrease taxes.
19
Which of these is a tool of fiscal policy?
spending on public roads and bridges
changing interest rates
changing income taxes
the discount rate
20
Which of these is a business that is owned by many shareholders that have limited liability?
Sole Proprietorship
Corporation
Partnership
Franchise
21
What is a better long term investment?
Meme Stocks
Renting a house
A brand new Honda Pilot
Purchasing a House
22
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 recessions occur too much.
That the government has too much power.
23
Which of these has the absolute lowest risk and return?
bonds
savings accounts
certificates of deposit
stocks
24
What is the key problem of economics
There are limited wants and unlimited resources
Managing money is difficult
There are unlimited wants and limited resources
The rich get richer and the poor get poorer
25
How much should a society produce?
Q*
Q3
Q1
At point A
26
How should we save our money for emergencies?
Buy bitcoin and GME
What Save??? YOLO
In small incremements consistently each month.
Once every couple months.
27
What economy most closely resembles the ideas of Adam Smith?
Free Market (Capitalism)
Traditional Economy
Mixed Economy
Centrally Planned Economy (Socialism)
28
The law of supply states:
when price increases quantity demanded increases
when price increases quantity supplied decreases
when price increases quantity demanded decreases
when price increases quantity supplied increases
29
What happens to GDP, Unemployment and Price Level when the government spends money to fix a recession?
GDP Increases, Unemployment Decreases, and Prices Increase.
GDP Decreases, Unemployment Increases, and Price Level Decreases.
Nothing happens, the economy fixes itself.
30
What are the two most important factors of a credit score?
Credit Utilization/Usage
Credit Mix
Payment History
Newest Account
31
What is the result of the implementation of a price floor?
It creates a shortage because the Qs is greater than Qd
It creates a surplus because Qs is greater than Qd
It creates a shortage because Qd is greater than Qs
It creates a surplus because Qd is greater than Qs
32
Which of these has the highest risk and return?
certificates of deposit
stocks
bonds
savings accounts
33
What is Human Capital
Knowledge and Skills
Natural Resources
Machines and Tools
Business Owners
34
What is Physical Capital
Natural Resources
Machines and Tools
Knowledge and Skills
Business Owners
35
What is an optimal inflation, unemployment rate, and GDP Growth Rate?
Inflation 1% Unemployment 10% GDP -10%
Inflation 10% Unemployment 1% GDP 8%
Inflation -5% Unemployment 35% GDP -30%
Inflation 2-3% Unemployment 3-5% GDP 2-3%
36
What happens to price and quantity when the government breaks up a monopoly.
Price Increases and Quantity Increase
Price Decreases and Quantity Decreases
Price Increases and Quantity Decreases
Price Decreases and Quantity Increases
37
Which of these is a tool by the Federal Reserve?
changing interest rates
changing income taxes
the discount rate
spending on public roads and bridges
38
What happens when a populations wants and needs exceed its resources?
decreases in demand
Surpluses
Shortages
Falling prices
39
What is a business with one owner that has unlimited personal liability?
Corporation
Partnership
Franchise
Sole Proprietorship
40
What are some of Adam Smith's key ideas?
Government must control all aspects of production.
The government should take a laissez faire (invisible hand) approach.
The government needs to be actively involved in fixing the economy.
The proletariat are exploited so they will overthrow the bourgeoisie.
41
When the price of milk increases, what happens to the demand for cookies?
It decreases
It stays the same
It increases.
It doesn't matter.
42
You are concerned that your job may cause you to have a lifelong injury; which insurance should you buy?
Health insurance
disability insurance
life insurance
auto insurance
43
What economic system did Karl Marx influence?
Traditional Economy
The Centrally Planned Economy
Capitalism
Free Market Economy
