Fundamental Economic Questions
The three fundamental questions every economy must answer.
What are "What will be produced? How will it be produced? For whom will it be produced?"
The four major economic systems.
What are Traditional, Market, Mixed Market, and Command?
The total value of all goods and services produced in a country.
What is Gross Domestic Product (GDP)?
The government’s use of spending and taxation to influence the economy.
What is "Fiscal Policy?"
The four phases of the business cycle
What are "Expansion, Peak, Contraction, and Trough?"
The study of how people satisfy their wants and needs through choices.
What is Economics?
An economic system characterized by private ownership and the desire to make a profit.
What is Capitalism?
An example of something NOT included in GDP.
What is Used goods, illegal transactions, or unpaid work?
The government’s control over the money supply and interest rates
What is "Monetary Policy?"
A prolonged period of economic decline
What is "A Recession?"
This occurs when resources are limited but human wants are unlimited
What is Scarcity?
A system where the government controls some industries but allows private ownership.
What is Socialism?
The measure used to track changes in the cost of living
What is Consumer Price Index (CPI)?
Government spending that Congress must approve annually.
What is "Discretionary Spending?"
A severe and long-lasting economic downturn
What is a "Depression?"
The strongest determinant of economic decisions
What is Prices?
A market dominated by a single seller
What is Monopoly?
The three largest categories in the Consumer Price Index.
What are Housing, Transportation, and Food?
Government spending that is required by law, such as Social Security and Medicare
What is "Mandatory Spending?"
The percentage of people actively looking for work but unable to find jobs
What is "The Unemployment Rate?"
The model that shows the movement of money, goods, and services between households and businesses.
What is "The Circular Flow Model?"
A market structure where a few large firms dominate the industry
What is Oligopoly?
When the Consumer Price Index rises, this also rises for the average consumer
What is "The cost of living?"
The top three expenses of the federal government.
What are "Social Security, Medicare, and Defense?"
The four types of unemployment
What are Frictional, Structural, Cyclical, and Seasonal Unemployment?