Famous Economists
Who wrote The Wealth of Nations?
Adam Smith
When a concert sells out quickly, is demand high or low?
High
What do we call the interest charged for borrowing money?
Interest
What do we call a person who listens to business owners who want to start a new company?
An Investor
What type of policy involves government spending and taxes?
Fiscal policy
Which economist believed markets work best with little government control?
Adam Smith
If gas prices rise, what usually happens to demand?
Demand Decreases
What U.S. institution controls interest rates?
Federal Reserve
What market type has many sellers and similar products (like clothing brands)?
Monopolistic competition
When the government increases spending during a recession, what is the goal?
To stimulate economic growth
Who supported government spending during economic downturns?
John Maynard Keynes
Why are water prices higher during a drought?
Lower Supply
What happens to borrowing when interest rates rise?
Borrowing decreases
What do we call money earned from selling products?
Revenue
What economic problem does the Federal Reserve target by raising interest rates?
Inflation
Which economist warned that too much money printing causes inflation?
Milton Friedman
When supply and demand are equal, what is this called?
Equilibrium Price
What is inflation? (In two words)
Rising Prices
When costs are greater than revenue, is this profit or loss?
Loss
What is the likely effect of higher interest rates on consumer spending?
Consumer spending decreases
Who is associated with innovation and “creative destruction”?
Joseph Schumpeter
What happens to price when supply decreases and demand stays the same?
Price Increases
Why do people save/ invest money in banks?
Future security
Why do companies advertise?
To increase demand!!!! (duh)
If the government runs large deficits for many years, what is one long-term economic risk?
Rising national debt / crowding out private investment