Economic Decisions
The first step in the decision making process is listing the alternatives. T/F (if false, what is the correct answer)
False - Define the Problem
What is a consumer vs. a producer?
A consumer is a person who buys and uses goods and services.
A producer is an individual or business that determines what products and services will be available for sale.
Reduces the purchasing power of money and is the general increase in the level of prices in an economy.
What is inflation?
A good or service that is sold to a US resident from a foreign resident.
What is an Import?
When an economy spends less than its' income.
What is a budget surplus?
Not having enough resources to satisfy every need.
What is Scarcity?
An economy where resources are owned and controlled by the government.
What is a command economy?
Unemployment percentages are an important indicator of economic activity. T/F
True
The price at which one currency can buy another currency.
What is an exchange rate?
What countries made up NAFTA now called USMCA?
US, Mexico, Canada
What are 3 examples of services?
Hair cutting, mowing lawns, plumbing, car maintenance, dry cleaning, car washing, etc.
What are the 3 questions every economy needs to answer.
What to Produce?
How to produce?
What needs and wants are we going to satisfy?
What are the 4 steps in the Business Cycle?
Prosperity, Recession, Depression, Recovery
When the value of a country's currency goes up compared to another country.
What is a favorable exchange rate?
If no one wants to buy products from a certain country that country's currency will
Decrease
List all 6 steps in the decision making process?
Define the Problem
Identify the Choices
Evaluate the Pros and cons of each choice
Choose the Best Alternative
Act on Your Choice
Review Your Decision
Explain the terms supply and demand
Supply is quantity of a good or service that businesses are willing and able to provide.
Demand is the quantity of a good or service that consumers are willing and able to buy.
Depressions don't typically follow recessions in countries that have strong economies. T/F
Mostly True
Quotas and tariffs are examples of
Trade barriers
What does GDP stand for and measures?
Gross Domestic Product and it measures the value of goods and services produced by a country in one year.
What is the main difference between a command economy and a market economy?
In a command - the government decides what goods and services will be produced and how they will be produced.
In a market economy the individuals or businesses decide.
As prices increase for a product, the business will be able to supply _________________ (more or less of it)
Budget Deficit - result of a government spending more than it collects in taxes
National Debt - the total amount a government owes at any given time.
What do economists use to measure how well an economy is doing?
Economic Indicators
Why might a country choose to lower the value of its' own currency?
To encourage more people/countries to buy or do business there