Unit 1
What drives the economy?
Scarcity
Where does the business cycle always start from?
Expansion
What is the National Debt of US?
$33.13 Trillion
Which of these allows a country to produce a good or service at a lower opportunity cost?
A. Comparative Advantage
B. Absolute Advantage
A. Comparative Advantage
Define opportunity cost?
The value given up by not taking the advantage of the next best alternate.
Who wrote the Wealth of Nations?
Adam Smith
What is the main purpose of the Federal Reserve Bank?
Implement monetary policy
Who begins and ends the Federal Budge Process?
The President
What is the trade balance of US?
Trade deficit
Define GDP
the value of all finished goods and services produced within a country's borders
Cuba and North Korea are what type of economy?
Command Economy
Two main purposes of "Dual mandate"
1. Achieving maximum employment
2. Maintaining stable prices
What is the highest government spending?
Mandatory Spending
Is standard of living a benefit of globalization?
A. True
B. False
A. True
Define deficit?
Spending is higher than the revenue
Which of the following is NOT a supply determinant?
A. Seller Size
B. Expectations
C. Technology
D. Income
D. Income
If the GDP is declining and the economy is entering a recession, what part of businesses cycle is indicated and what policy would be implemented by the Federal Reserve?
Contraction/'Expansionary Policy (Loose Money Policy)
How does COLA benefit us?
It counteracts inflation
Which policy wiped our restrictions and duties on clothing?
NAFTA
Define absolute advantage?
the ability of a specific country to produce a good at a lower cost per unit.
What are the 5 market structures?
Monopoly, Oligopoly, Monopolistic, Competitive, Perfect Competition
What was the "Beige Book" used for?
Prepare bank presidents for FOMC meetings and monetary policy decisions and factors into decisions made by the board of governors.
How does the eminent domain relate to state property?
The rights are held collectively with control exercised by an authority or agency. Managers have incentive for personal gain.
What are the five big NC industries?
Technology, Pharmaceuticals, Banking, Food Processing, Vehicle Parts
Define trade balance
the difference between the value of a country's imports vs. exports for a given period.