Economic Terms
Define Economics
Economics is the science of choice.
What are some of the characteristics of market economies?
No government control.
Free exchange.
Competition.
What’s the term for too much supply?
Surplus
What is the central bank of the US?
The Federal Reserve
What os the 50-30-20 rule?
50% goes to needs. 30% goes to wants. 20% goes to
Define Entrepreneur
A person who starts and runs a business.
The government owns the factors of production in this type of economic system.
Command
Too much demand?
Shortage
How many regional banks are there?
12
Compared to going to college, working directly after high school has the following advantages, EXCEPT:
Expanding career growth that never requires further training.
Define Scarcity
Unlimited wants + limited resources.
The Inuit, the Amish, and many “undeveloped” countries are examples of this type of economic system.
Traditional
The law of demand states that as prices increase, demand will ______. Explain why?
Decrease. Consumers do not want to spend to much money on products.
What group decides policy for the Federal Reserve?
Federal Open Market Policy.
What is the difference between a W-2 and a W-4 form? Who fills each out? What kind of information can you find on each?
The employer fills out the W-2 form, and a new employee fills out the W-4 form. Fill a W-4 out when you begin a new job to tell your employer how much money you want deducted from your checks for federal and state income taxes.
Define Opportunity Cost
Cost of the next best use of your time/$ if you chose to do one thing rather than another.
Economic freedom and competition characterize this economic system.
Market
What does the law of supply state? Explain.
As prices increase, the quantity supplied increases. As prices decrease, the quantity supplied decreases.
How does the Fed promote stable economic growth through monetary policy?
Controlling the money supply
What agency insures bank deposits? What does the acronym stand for?
FDIC. Federal Deposit Insurance Corporation.
Define Certificate of Deposit (CD)
Savings tool with fixed interest and withdrawal time.
Explain how the USA is an example of both Market and Mixed economic styles?
USA is great example of free market with some limits/restrictions on businesses and corporations.
Ex. No monopolies, FDA, anti-trust
Market equilibrium exists when the number supplied and number demanded are ____________________.
equal
What are the functions of the Federal Reserve? Name all 5.
Monetary Policy, Payment Services, Supervision and Regulation, Financial System Stability, Consumer Protection.
How do insurance companies decide the cost of premiums?
Some common factors insurance companies evaluate when calculating your insurance premiums is your age, medical history, life history, and credit score.
Define Overdraft
Spending more money than is available in an account.