Economic Terms
A legal maximum price that can be charged
price ceiling
What does GDP stand for?
Gross Domestic Product
What are the 4 factors of production?
land, labor, capital, entrepreneurship
Label the Business Cycle
#2
peak
Which policy is not influenced by politics?
monetary policy
A legal minimum price below which goods cannot be sold
price floor
NDP is similar GDP but takes WHAT factor into account
depreciation
In the economic trade off example Guns vs. Butter, what do "guns" and "butter" represent?
national defense & domestic goods
Label the Business Cycle
#5
trough
Which policy is set by the government?
fiscal policy
an economic system in which decisions are made according to tradition, customs, and belief
traditional economic system
Is Personal Income BEFORE or AFTER taxes?
BEFORE
when the quantity SUPPLIED is greater than the quantity DEMANDED
surplus
Label the Business Cycle
#1
expansion
Which policy is used to target inflation?
monetary policy
an economic system in which the government makes the decisions
command economic system
Is Disposable Personal Income BEFORE or AFTER taxes?
After
when the quantity DEMANDED is greater than the quantity SUPPLIED
shortage
Label the Business Cycle
#4
depression
What is one argument in FAVOR of free trade?
improved products, protect workers in export industries, promote specialization and comparative advantage
an economic system in which individuals make decisions
market economic system
The FED will raise the reserve requirement when they want the economy to speed up/slow down because there will be less/more money in circulation
slow down, less
What is the basic problem to be answered in economics?
How to fulfill unlimited wants with limited resources
Label the Business Cycle
#3 and #6
recession and recovery
What is one argument AGAINST free trade?
job security, national economic security and to protect infant industries