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