Economic Systems
What type of market system is the United States?
Mixed market system
What is scarcity
unlimited wants but a limited amount of resources (time, money, etc)
What is the reserve requirement? Would raising it decrease or increase inflation?
The amount of money the banks have to have on them at any point. Raising the reserve requirement would decrease inflation.
What are entitlement programs?
Federal programs that provide aid to people who meet certain requirements. They are designed to help ensure people have a basic standard of living.
ex:
- WIC
- Pell grants
- Social Security
What type of economic systems makes decisions based on beliefs and customs.
Traditional systems.
What does the business cycle illustrate?
Periods of change (growth and decline) in the economy?
What is inflation? How does that impact the value of the dollar?
An increase in the general price level of goods and services in an economy. Each individual dollar becomes less value.
What is the purpose of regulatory agencies?
Regulatory agencies are responsible for ensuring that the government prevents businesses abusing people's rights
The black market is an example of what economic system?
Free market
What is opportunity Cost
How is Monetary Policy enforced? Who is in charge?
1.) Reserve requirement
2.) Interest rates
3.) Discount rate
Ran by: the reserve requirement
What are socio-economic goals? How do they guide government behavior?
Economic and social goals are an important part of an efficient economic system. These goals guide policymakers to make proper economic decisions.
What is a pro and a con of a Mixed Market System?
Pro:
Can focus on
Social welfare, Political freedom, Individual liberties
Have some freedom of choice.
Con:
1.) Governments can move slowly.
2.) May be inefficient and may not lead to optimal use of resources
What is Gross Domestic Product? (GDP)
The total value of all the finished goods and services produced within a country's border
How might the Federal Reserve respond if the GDP of the US decreases?
- Cut taxes
- Sell government securities
- Lower the discount rate
- Increase the reserve requirement
Lower the discount rate.
How might Congress respond to an economy that is growing to fast?
What type of economic system do countries at war typically adopt and why?
Command
What is the consumer price index?
The percent of change in the cost of an item from one year to the next.
What are examples Fiscal Policy? Who determines it?
Raising and lowering taxes; government spending.
The federal government.
What is Social Security? Who does it cover and what is one argument for and criticism of it?
Social Security is a entitlement program that provides monthly checks to people who qualify. It was originally designed to help the elderly prevent mass poverty in old age.
Those who are eliabgle.
- People who are 65+
- People with disabilities
- Veterans/ family members
Final jeopardy