Schools of Thought
When there is an economic crisis, who's fault is it?
Everyone, the consumers, the government, and the banks.
This was the first medium of exchange, where people often traded goods and services, for other goods and services, without exchanging money.
Barter
Fancy word for cash
Liquidity
Name one good or service that is considered relatively "inelastic?"
Gas, plane tickets, medication, fast food, subscription services, etc.
How of the U.S. budget is spent on Foreign Aid each year?
1%
When should the government intervene with the economy?
Only during a serious crisis, like a natural disaster, or a long depression.
What was the "gold standard?"
The government couldn’t issue more money than it had in gold reserves.
a hypothetical unit of measurement used to quantify the satisfaction, pleasure, or value a consumer receives from consuming a good or service
Utils
Explain the "Tragedy of the Commons."
Public goods are often misused, exploited, and taken for granted, when there is no regulations enforced to stop it.
A market controlled by one seller with no close substitutes, is known as a...
Monopoly
Who controls the means of production in a Socialist government system?
Both individuals and the state, certain industries are controlled by the state, while others are left up to private enterprise.
What does the financial systems do?
Brings lenders and borrows together.
How products respond to a variable of change
Elasticity
The specific amount of money you must pay out-of-pocket for covered expenses before your insurance policy starts paying, is known as a...
Deductible
What is a progressive tax system?
A tax system where the higher your income, the higher percentage of tax you pay.
This book, written by Adam Smith, criticized mercantile economics, and proposed that economies would be more productive and efficient when countries specialized in particular products, and traded internationally with other countries.
The Wealth of Nations
What are the 3 purposes of money?
Medium of Exchange, store of value, and unit of account.
The value of an asset + interest - the cost of the liability to own it
Equity
What is a "direct tax," and provide an example.
Taxes paid directly to the government, ie. income tax, property taxes, state taxes, etc.
How much of the worlds total wealth by North American and Europe combined?
67%
The name of the economist, who was a proponent of government intervention during economic crisis.
John Maynard Keynes
How are bonds and stocks different?
Bonds = Debt
Stocks = Equity
Economic inefficiency that occurs when the quantity produced is less than what society wants
Deadweight Loss
a side effect or a consequence of some activity, that isn’t reflected in the cost or service involved, is called a...
Externality
What is a free rider, in economic terms?
Someone who benefits from resources without paying their fair share.