Overview of the U.S. Economy
What name is given to a person who buys or uses products and services?
consumer
What are economic signs that help economists make predictions about future economic growth?
leading indicators
What are special tax breaks for businesses that encourages investment?
tax incentives
What is the name given to a situation that exists when a country can produce a good better than its trading partners?
absolute advantage
Name a country that the U.S. has an embargo against.
Cuba, North Korea, and Iran
What is the name given to a person or economy who provides a good or service that satisfies consumers' needs?
producer
What are economic signs that help economists determine how long the current economic situation will last?
coincident indicators
What is an economic policy that increases the amount of money in the economy?
What is the method of determining which products or services offer a nation the greatest absolute advantage?
comparative advantage
What is the name of the free trade agreement between Canada, Mexico, and the United States?
USMCA
What the economic rivalry among businesses selling products?
competititon
What are economic signs that lag behind or follow, major changes in the business cycle?
lagging indicators
Which economic policy involves raising interest rates to decrease the amount of money borrowed and reduce inflation?
tight-money policy
What is the value of an alternative good or service that a company or country has chosen not to produce in order to specialize in something else?
opportunity cost
When a country adopts a tight-money policy, what is the reason?
inflation
What is the economic model that displays house households, businesses, and the government interact in the economy?
circular-flow model
What are the stages of the business cycle?
1. expansion
2. peak
3. contraction
4. trough
What are five ways the federal government regulates the American economy?
1. protection of workers
2. protection of consumers
3. limiting negative effects
4. encouraging competition
5. regulation of private property
What is the difference in value between a country's imports and exports?
balance of payments
What are three effects that international trade has on consumers?
1. more choices on people can buy
2. higher standard of living
3. lower prices
How might investment help the economy?
Money from investments helps businesses grow, develop new products, and hire more workers.
Describe one current event mentioned during the chapter that caused change in the U.S. economy.
9-11 terrorist attacks
Hurricane Katrina
Covid-19 epidemic
What is the amount of money that banks must have on hand?
reserve requirement
How does a country determine which goods and services it should produce and which it should import?
By examining its absolute and comparative advantages and considering opportunity costs.
What percentage of the federal government's revenue was spent on Social Security in 2004?
21%