Supply & Demand
If there is a high supply of a product, but low demand for it, what will typically happen to the price of that product or service?
It will go down
When the economy and factors of production are controlled by the government, that economics system is called...
Planned, or Command economy
What is liquidity?
Cash assets, or the ability to turn another asset into cash without losing value.
Macroeconomics deals with what?
The bigger picture of the economy. Things like GDP, Unemployment, etc.
What does most of the U.S. Budget go towards?
Healthcare/Social Security
If the demand is higher than the supply in any given market, it will most likely lead to a...
Shortage
Which economies work the best in the modern day?
What ultimately keeps the economy going?
Confidence
Which of these is NOT a goal economists?
1. Keep the economy growing
2. Limit Unemployment
3. Making sure prices are cheap and less expensive
3
Who is in charge of the amount of money that is put into circulation in the U.S.?
The Federal Reserve
Who is considered the father of modern economics, who created the theory of Supply & Demand.
Adam Smith
In a free market economy, who technically controls the economy?
Individuals, or the people.
How do economists calculate GDP per capita?
Total GDP divided by the total population of a nation.
TRUE or FALSE: A business owner deciding if they are going to provide health insurance benefits to their employees is a good example of Macroeconomics?
FALSE
What is deficit spending?
Borrowing/Spending more money than a country collects in tax revenue.
Producers don't want to much inflation or deflation for their products. They use supply & demand to find a price that is balanced - which economists call...
Equilibrium
What does a free market provide the consumer that a command economy doesn't?
Choice via competition
What does the the Consumer Price Index show us?
The rate of inflation for a product or service over time.
Recession occurs when the GDP of a nation is...
declining, usually for two business quarters (6 months)
Real GDP is adjusted for...
Inflation
What is the name of the graph that illustrates the efficiency of two or more products being produced, calculating the comparative advantage that different nations have in the trade market? (Hint: PPF)
Production Possibilities Frontier
Product market supplies money to the resource market, and vice versa - what do we call this?
Circular Flow
What are the 4 factors of production?
Resources (Raw Materials)
Human Capital (Labor/Education)
Capital Goods (Technology)
Entrepreneurship (Business/Innovation)
What type of unemployment do economists want to avoid?
Cyclical
What is a recessionary gap?
When the real GDP is lower than the potential GDP.