Supply & Demand
This term means limited resources compared to unlimited wants
Scarcity
Printed paper and metallic coins used to buy goods are called
Currency
Government spending and taxes are part of what policy?
Fiscal Policy
A person who starts a business is called an
Entrepreneur
The total value of goods/services produced in a country is called
GDP (Gross Domestic Product)
The cost of the next best alternative is called
Opportunity Cost
A bank pays you 2% for keeping money in savings. What is this called?
Interest
A government gives farmers money to grow crops. What is this called?
Subsidy
Revenue minus costs equals what?
Profit
The percentage of people looking for jobs but can’t find one is called?
The unemployment rate
A toy sells out during the holidays. Which economic concept explains this?
Demand
True or False: Credit means borrowing money you must repay later
True
What is the difference between a tax and a tariff
Tax = domestic on goods & services; Tariff = Fee on imported goods.
A country makes cars more efficiently than others. Which concept explains this?
Comparative Advantage
Prices rise across the economy. Which term describes this?
Inflation
If supply decreases, what most likely happens to price?
When the Federal Reserve (A government agency) lowers interest rates, which policy is this called?
Monetary Policy
True or False: Fiscal policy is controlled by the central bank
False
Compare goods vs. services
Goods = tangible items; Services = actions performed.
CPI or Consumer Price Index, measures changes in the prices of
Consumer goods & services
Explain the difference between supply and demand, in terms of willingness to do something.
Supply=producers willing to sell; Demand = consumers willing to buy.
If you borrow $100 and pay back $110, what was the interest?
$10
Explain how fiscal and monetary policy can work together to fight recession
Fiscal = increase spending/cut taxes; Monetary = lower interest rates.
Explain how opportunity cost affects entrepreneurs when starting a business
They must give up other uses of time/money to pursue the venture
What is the difference between recession and depression
Recession = short-term economic decline; Depression = severe, long-term decline