Basic Economic Concepts
When prices rise across the economy and each dollar buys a little less than before, this is happening
What is inflation?
What is the money you earn from working called?
What is income?
When price increases, quantity demanded decreases. What law does this describe?
What is the law of demand?
What is the name for the total value of all goods and services produced by a country in one year?
What is Gross Domestic Product (GDP)?
What are the three main functions of money?
Medium of exchange, store of value, and unit of account.
This type of investment pool lets everyday people buy a mix of stocks and bonds managed by professionals
What is a mutual fund?
What is a plan for how you will spend and save your money?
What is a budget?
What happens to the demand curve when consumer income increases for a normal good?
It shifts to the right
What is the term for when a country imports more than it exports?
What is a trade deficit?
What is the name of Canada’s central bank, which manages the nation’s money supply and interest rates?
What is the Bank of Canada?
This financial statement shows a company’s assets, liabilities, and equity at a single point in time
What is a balance sheet?
What is the cost of borrowing money called?
What is interest?
What is the point where the supply and demand curves intersect called?
What is equilibrium?
Which international organization promotes free trade and settles trade disputes between nations?
What is the World Trade Organization (WTO)?
When you deposit money in a bank and earn a small percentage in return, what is that percentage called?
What is interest?
This fundamental equation of accounting balances what a business owns with what it owes and what belongs to the owner
What are Assets - Liabilities = Equity?
What is a person’s ability to repay borrowed money called?
What is creditworthiness (or credit score)?
If the price of coffee rises, what will likely happen to the demand for tea (a substitute)?
It will increase
When the Canadian dollar strengthens against the U.S. dollar, what happens to Canadian exports?
They become more expensive for foreign buyers
When the Bank of Canada raises interest rates, what usually happens to consumer borrowing?
It decreases because loans become more expensive.
In this type of economy, decisions about production and distribution are made mostly by government planners rather than by consumers or businesses.
What is a command economy?
What do we call the money you invest in a company that can go up or down in value?
What are stocks (or shares)?
A government-imposed minimum price, such as for minimum wage, is known as what?
What is a price floor?
The movement of production to countries with lower costs is called what?
What is outsourcing or offshoring?
What is the system called where banks keep only part of their deposits and lend out the rest?
What is fractional reserve banking?