Economic concepts
This economic measure represents the total value of all final goods and services produced within a country in a year.
GDP (Gross Domestic Product)
Which part of the government is responsible for conducting fiscal policy?
Congress and the President.
When a country can produce more of a good using the same resources
Absolute Advantage
What is overtime pay, and when does an employee earn it?
1.5× regular wage for working over 40 hours per week
What is the difference between secured and unsecured loans?
Secured loans require collateral; unsecured loans do not
Which phase of the business cycle is characterized by falling GDP, rising unemployment, and decreased consumer spending?
Contraction
Lowering taxes and/or increasing government spending are examples of which type of fiscal policy?
Expansionary Fiscal Policy
A country raises tariffs on imported steel. Identify one domestic group that benefits and one group that is harmed.
Benefit → domestic steel companies
Harm→ consumers OR industries that use steel in products
Is health insurance a mandatory or optional paycheck deduction?
Optional
The original amount borrowed in a loan
Principal
This tax system takes a larger percentage from higher-income earners.
Progressive Tax
What fiscal policy actions might be taken in order to combat a rise in unemployment?
Increase Government Spending OR Cut Taxes
Government financial support to domestic producers.
Subsidy
A fixed amount you pay for a service or office/ER visit before insurance covers the rest
Copay
Revolving credit is most commonly associated with which financial product?
Credit cards
In which market structure do a few large firms dominate the industry and may engage in price leadership
Oligopoly
Unemployment is low but prices are rapidly rising. What monetary policy action should the Fed implement?
Raise interest rates
This is the term for a ban on trade with another nation
embargo
An ___________ reviews factors about you and determines the insurance policy/coverage you qualify for
underwriter
How would having a high credit score save you money over time with an auto loan?
Higher Credit Score → Lower interest rate → lower monthly payments
What are the three basic economic questions every society must answer?
What to produce? How to produce? For whom to produce?
What type of law prohibits monopolies and unfair competition?
Antitrust laws
Fair Trade guarantees farmers a “price floor.” What does that mean?
A minimum guaranteed price to protect farmers from market swings
this mortgage type (offered by a government agency) often allows lower credit scores and small down payments but requires mortgage insurance
FHA (Federal Housing Authority) Loan
Variable-rate loans change based on what factor?
Changes in market interest rates in response to actions of the Federal Reserve