Economic Forces
Money
The Government and the Economy
International Economics
Key Terms
100
Humans must use economic systems in order to distribute resources because of this.
What is scarcity
100
Ultimately, this is what money is used as.
What is a Unit of Exchange.
100
Taxes, Tariffs, and government spending all fall under this type of policy.
What is Fiscal Policy.
100
Removing trade restrictions between countries results in this decreasing.
What is Prices of Imports.
100
The thing you give up in order to do something else.
What is Opportunity Cost
200
This says that as the price of something rises, demand will fall. (And vice versa)
What is the Law of Demand
200
A currency system where the value of money is based off of how much faith the public has in it.
What is Fiat Money
200
This type of policy involves regulating the amount of money in the economy.
What is Monetary Policy.
200
Nations usually specialize their economy and engage in international trade in order to increase this.
What is Productivity
200
The total value of goods and services produced in a country within a year.
What is Gross Domestic Product (GDP)
300
Land, Labor, and Capital are all examples of this.
What are Factors of Production
300
A phenomenon that occurs where the value of money slowly goes down over time resulting in steadily increasing prices.
What is Inflation
300
During an economic recession, the government could do this to its fiscal policy in order to try and stimulate the economy.
What is decrease taxes / increase spending.
300
If a country can produce the same amount of a good for cheaper than their trade partner, that country has this kind of advantage.
What is comparative advantage.
300
An economic system where the Central Government makes all economic decisions.
What is a Command Economy
400
In a free market, this force causes businesses to lower their prices in favor of the consumer.
What is Competition.
400
Economists use "real" dollars instead of actual values when comparing statistics over time in order to avoid this.
What is Inflation
400
As a general rule, the government increases the money supply in order to decrease this.
What is Interest Rates
400
If a country is capable of producing far more units of a good than their trade partner, they possess this kind of advantage.
What is absolute advantage.
400
This is the point where demand and supply are equal.
What is equilibrium.
500
This force regulates supply and demand in a free market system.
What is price.
500
This graph shows average price changes over a period of time and is used to calculate inflation.
What is the Consumer Price Index.
500
The government issues these in order to protect inventors and encourage innovation.
What is Patents.
500
This is often a negative side effect of free international trade due to competition from overseas.
What is unemployment.
500
A type of good that has little change in demand despite a change in price.
What is an Inelastic Good
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