Show:
The U.S. Economy
Influences and Predicting the Business Cycle
Government's Role in the U.S. Economy
Trade in the Governemt
Trade in the Government #2
100
What are the 4 types of economies? Explain them and state which economy does the U.S. have?
Traditional economy: Economic decisions are based on customs and traditions

Command economy: Government officials decide what will be made and how; a Communist economy

Market economy: all economic decisions depend on producer/consumer interactions

Mixed economy: includes elements of each economy

The U.S. has a mixed economy because it has some government regulations and consumer decisions. 









100
Explain how business investment affects the business cycle.
When businesses make investments, it can help expand the economy in 3 ways:

1) New capital goods can help businesses reach the demands of consumers.

2) New and more efficient machinery can be bought which can cause growth.

3) Research for innovated and new technologies can be supported by businesses

100
What are the 5 main goals of government regulations and explain them?
Protecting workers: The government tries to make sure workers are being paid fair wages and are not discriminated against. They also want to make sure that working conditions are not dangerous.

Protecting Consumers: The government tries to ensure that all products are safe for use and have been inspected by specialists.

Limiting negative Effects: the gov. tries to make sure that problems produced by the economy are kept at a minimum (e.g. pollution)

Encouragin Competition: The gov. tries to make sure companies compete fairly.

Government Regulation of Private property: Even though citizens have the main say in how their property will be used, the government can make laws about those rules.

100
India has a large supply of spices. With the surplus amount, they trade modern technology with the United States. Thus India relies on the U.S. for technology and vice versa.This is an example of...
Interdependence (because India now relies on the United States for this good)
100
hat do the reciprocal,  regional, and international trade agreements all do?
Reduce trade barriers between countries
200
What is the right that the free enterprise system gives all individuals?
All possible answers: own private property; make individual choices on how to use property; try to make money in any possible way
200
How does money and credit influence the business economy?
When banks lower interest rates, companies, and individuals borrow more money. This money can help start businesses, invest in companies, and buy products which could result in an expansion of the economy.
200
What is the fiscal policy? What are the three things it can do?
The fiscal policy is a tool the government uses to influence the economy. In the fiscal policy, taxes can be raised or reduced, government spending can be increased or decreased, and public transfer payments can be made. All of the changes made depend on the current state of the economy and how it needs to be handled/fixed.
200
Explain absolute advantage with comparative advantage.
Absolute advantage is when a country can produce more of a good than another country can. Comparative advantage is when it can provide a product more efficiently at a lower cost.
200
Explain why some people do not promote free trade.
They have several reasons such as protecting domestic industries and jobs, maintaining high wages, and national security. they do not want countries to take their jobs or foreign companies to threaten their industries with lowe prices.
300
What is the relationship between consumers and producers and how does this affect the free- enterprise system?
A consumer buys goods and services provided by the producers. What a consumer demand affect what the producer will make.
300
How does public opinion affect the business cycle?
When consumers believe that the economy is doing well and businesses are thriving, they will invest more money. Also, products that are well- known and have a good reputation are purchased more than others.
300
What is an easy money policy and a tight money policy? Compare and contrast.
Both of these policies are controlled by the Federal Reserve Banks. The easy money policy increases the money supply. This increases the demand for goods and services which expands the economy. The tight money policy decreases the amount of money in the money supply which leads to an economic slowdown.
300
Why do governments use trade barriers?
To protect industries from foreign competition 
300
Define balance of trade, trade deficit, and trade surplus.
Balance of trade: the difference of the value of a country's exports and imports

Trade deficit: When a country imports more than it exports

Trade surplus: When a country exports more than it imports

400
Explain how prices are affected by the laws of supply and demand.
In a free- enterprise system, consumers want products to be at lower prices while producers want to sell them at higher prices. The laws of supply and demand help balance these prices out. In the law of supply, the higher the prices are the more of the product will the company produce. But, according to the law of demand, consumers have a higher demand for a product if it is at a lower cost. Thus, businesses must balance their prices according to these laws.
400
How do international events affect the business cycle?
some events can leave Americans uncertain about the future of the economy such as 9/11. Other events which may take up resources can change prices. For example, in War World 2, rubber was needed for tires and other military objects. Thus, the prices for rubber rose drastically. 
400
Explain open market operations and why/how the Fed. changes it.
The open market operations revolve around the selling and buying of bonds. hen the Fed. needs to remove money from circulation, it sells more bonds to citizens. But when the Fed. wishes to increase the money supply, they buy the bonds back from investors.
400
What are the 2 different tariffs? Explain them.
Revenue tariff: This is tariff is made to raise money for the government

Protective tariff: This tariff is made to reduce competition

400
How does international trade affect jobs?
Because the minimum wages overseas are lower than here in America, companies often send their labor work to other countries. This decreases the number of jobs in America.
500
 What are the three groups in a circular flow model? Explain the interactions between these groups.
The 3 groups are the Federal Government, households, and businesses. The federal government collects taxes from businesses and individuals and provides services to them. Households buy goods and services from businesses. They provide labor and invest in companies. They also give the government labor and taxes. Lastly, businesses produce goods and services used by both households and the government. They pay wages to individuals and give taxes to the government.
500
What are the 3 different indicators that can help economists predict the future of the business cycle?
Leading indicators: these are signs that will lead to major changes in the economy

Coincident indicators: these are indicators that tell economist what is occurring in the present

Lagging indicators: signs that come after major events in the business cycle

500
Explain the reserve requirement and how the Fed. changes it.
Banks are given a certain amount of money which they must always have in their reserve. When the fed. increase this amount, banks give out fewer loans which slow down the economy. When the fed. decreases this amount, banks give out more loans which expand the economy.
500
Explain import quotas, voluntary restrictions, and embargoes. What are their purposes?
INport quotas: a limited amount of a specific product to be allowed to enter a country; made so that domestic businesses face less competition from foreign industries

Voluntary restrictions: agreement between to countries to limit trade; same purpose as import quotas

Embargoes: A ban on importing goods from a specific country; often done because of political rivalry rather than economic decisions

500
How foes international trade affect consumers?
International trade allows consumers to buy goods scarce in their own country. It also encourages competition which causes prices to drop. Thus consumers can save more money and invest in their savings.