K Bet!
What happens to the demand curve when there is an increase in consumer income, assuming the good is a normal good?
Demand curve shifts to the right
If the demand for a product is highly inelastic, the firm can increase revenue by:
Increasing the price of the product
If a price increase exceeds demand, and there is a tremendous increase in supply, what is the excess supply called?
Surplus
How is money divisible?
Enables precise pricing and facilitates transactions of varying amounts
Which guideline should an investor follow when planning their investment strategy?
The longer the investment period, the greater the risk they can afford to take
If the supply curve is perfectly inelastic, what does that mean?
Quantity supplied is fixed regardless of price
If each new worker adds more to total output than the last, this is called:
Increasing returns
What is the difference between elastic demand and inelastic demand?
Elastic demand changes drastically with price changes, inelastic demand is virtually unchanged with changes in price
What is the relationship between savings and investments?
Investments are a form of savings that are actively used to generate income
What is Gross Domestic Product? GDP
The market value of all final goods and services produced within a nation during a specified time period.
If the consumer views a good as a luxury and not a necessity, the demand for that good is likely to be
Elastic
If each new worker causes output to grow at a decreasing rate, this is called:
Diminishing returns
What do price floors like minimum wage create?
Surplus of labor
When considering investment options, what is the most critical factor an investor should assess first?
An investors objectives and risk tolerances
What does national income accounting primarily help economists to understand?
Overall performance of a nation's economy
When the price of a good decreases, the quantity supplied of that good also decreases due to:
Law of Supply
Accurately defines a fixed cost vs. a variable cost for a business
Fixed costs are set and unchanging, variable costs are difficult to predict
What makes money durable?
What is the function of financial markets?
Financial markets facilitate the buying and selling of financial assets
In the context of Economic indicators, what does the term "investment" specifically refer to?
Purchase of stocks and bonds by individuals
Suppose the demand for a good is inelastic, what does that mean?
Quantity demanded is not very responsive to price changes
What is the difference between elastic supply and inelastic supply?
Elastic supply is flexible and easily changed, inelastic cannot be changed easily
What makes money portable?
Convenient for individuals to carry and use in transactions
Historically, what is considered the least risky investment option?
US government bonds
What is the significance of understanding the concept of aggregate demand?
Indicates the total demand for goods and services across all sectors of the economy at various price levels