What is a group that acts together to set prices and limit output?
A cartel
100
What does deregulation do?
It reduces or removes government control of business
100
How do you calculate Net Exports?
Net Exports = USA Exports - USA Imports
100
What measures and reports the change in prices of a set of stocks?
A stock index
100
What does it mean to barter?
To exchange goods and services WITHOUT using money
200
What is a barrier to entry?
Something that makes market entry difficult for other firms
200
What order requires a firm to stop unfair business practice?
A cease and desist order
200
Why are transfer payments not part of government spending? What category do they go into?
They go into consumption because although the government is paying for it, the households are consuming it
200
What's the difference between a bull and a bear market?
Bull market means stock market prices are rising and bear market means stock market prices are falling
200
What are the 2 properties of money?
Physical and economic
300
What is the main difference between monopolistic competition and perfect competition?
Perfect competition has standardized products, while monopolistic competition has similar but NOT standardized
300
What is it called when businesses set prices below cost for a time to drive competitors out of the market?
Predatory pricing
300
What percent of the GDP do black markets account for?
Black markets are not counted in the GDP. But they do make up 8-10% of the US economy as a whole
300
Name 2 kinds of bonds and what they are for
1. Corporate bond; for businesses
2. Treasury bond; keeps federal government spending
3. Municipal bond; state/local government spending
4. Junk bond; high risk/high yield corporate bond
300
What is the difference between store value and standard value?
Store of value means it holds its value over time, while standard of value determines the economic worth in the exchange process
400
What happens in an economy of scale?
The average cost of production falls as the producer grows
400
What does the Antitrust Legislation do?
It defines monopolies and gives government power to regulate them
400
What are non-market activities? List 2 examples
Output not measured
ex. babysitting, cooking, house sitting, dog walking
400
What's the difference between common stock and preferred stock?
In common stock you have voting rights and shores of profits, while in preferred stock you have share of profits, no voting rights, but are payed dividends
400
What does the Federal Deposit Insurance Corporation (FDIC) do?
It (the government) insures customer deposits of a bank fails
500
List the characteristics of an oligopoly
1. Few sellers, many buyers (4 largest firms)
2. Standardized or differentiated products
3. More control of prices
4. Little freedom to enter or exit market
500
What is market allocation?
When businesses divide a market amongst themselves
500
What is the difference between nominal GDP and real GDP?
Nominal GDP states the GDP in terms of current value, and real GDP states the GDP corrected from changes in prices year to year
500
What's the difference between capital market and money market?
The capital market is for long term financial investments and the money market is for short term financial investments
500
What's an example of commodity money, representative money, and fiat money?
Commodity Money - intrinsic value based on material
ex. livestock
Representative Money - paper money backed by something tangible
ex. I Owe You
Fiat Money - declared valuable by the government and accepted by citizens
ex. the $1 bill