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BJU Economics Chapter 2 Flashcards | StudBud
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BJU Economics Chapter 2
BJU Economics Chapter 2
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Bob Jones University Press 3rd Edition Economics
Flashcards
26 cards
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Practice quiz
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Questions
26
Answers
1
Households and business firms are the elements most basic to the circular flow model.
False
True
2
What is the function of financial markets?
Raising taxes on the rich
Slow down the flow of capital
Transfer savings to businesses for operations
Turning debt into profit
3
What is Carl Menger the founder of?
Communism
The stock market
Marxism
The Austrian School of Economics
4
What is a budget deficit?
Spending exactly what is earned.
Having more money in the bank
Spending less than is earned
Spening more than is earned
5
Which NOT a factor of production?
Capital
Land
Labor
Taxes
6
On a PPC graph, any point on the graphed line represents
The boundary line between crops
The minimum amount you can earn
The most efficient use of resources
The lowest cost
7
From whom do businesses ultimately get the factors of production?
Foreign Countries
Banks
Stock market
Households
8
___ is the result of withdrawing money from an account.
Investing
Bankruptcy
Government waste
Dissaving
9
What is a budget surplus?
Spening more than is earned
Spending less than is earned
Spending exactly what is earned.
10
Name the two primary reason to use economic models?
invent and create
provide and predict
instruct and interest
predict and instruct
11
How should the government impact profit making?
Regulate it heavily to limit greed
Discourage it because of greed
Tax it as high as possible
Support ethical business practices
12
What is Ludwig von Mises know for supporting?
Highr taxes
Free markets
Government regulation
Unethical business practices
13
What part of government is represented in the circular flow model?
Federal government
State government
All levels of governance
City/county governments
14
What is the definition of factor cost?
The sum of profits minus expenses
Interest on business loans
Taxes paid to the government
Payments made for the factors of production
15
What part of the circular model represents the public sector?
Households
Government
Banks
Investment firms
16
Why is entrepreneurship so important?
Carl Menger
It makes money
It's the Bible thing to do
It plans, directs and organizes production.
17
What is real capital?
Cash money
Materials and tools used to make goods
The building where the president works
Gold
18
Which is not an example of a transfer payment?
Postal worker wages
Social security payments
Government unemployment payments
Grants in aid
19
What is the chief advantage of the line graph over the schedule
Because Carl Menger said it was better
They provide more information
They are simpler
Lines are easier to draw
20
What are consumption expenditures?
The total amount spent on goods and services by households
The cost of doing business
The amount of money sent by the government into taxpayers accounts
The cost of consuming a meal at a restaurant
21
Which one is not an example of dissaving?
Taking out a mortgage
Opening a checking account
Using a credit card
Withdrawal from an ATM
22
What is the principle taught by the broken window fallacy?
Intrinsic value
The high cost of business
Hidden costs
Stewardship
23
What are the two basic elements of the circular flow model?
Business and Government
Households and Government
Households and Business
Financial Markets and Government
24
What two principles contribute to the need for choices?
Instability
Stewardship
Scarcity
Contentment
25
Discouraging ___ can seriously damage national economy.
Entrepreneurship
Socialism
High interest rates
Debt
26
What is the most important factor of production?
Capital
Land
Labor
Entrepreneurship
