95 terms

Economics

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what happens to gold when econ. and politics are unstable?
the demand increases
Under perfect competition, what would be seen in the marker place?
Supply and demand set the equilibrium price and profits are maximized
technical monopoly
monopoly that controls a manufacturing process
deficiency payment
check that makes up diff. between actual and target price, goes to farmers
surplus
when the quantity supplied is greater than the quantity demanded at any given price.
theory of production
relates of production an the output of goods and services
Profit maximizing output
when its marginal cost is equal to its marginal revenue
Lorenz Curve
shows how much the actual distribution of income varies from an equal distribution
Commodity money
money that has alternative use and economic good
Reciprocal Trade Agreement Act
allows the government to reduce tariffs up to 50% if other countries agree to do the same
Demand schedule
shows the various quantities demanded at any given price, in form of a chart.
Population center of U.S.
Edgar Springs,Missouri
Why is the government so active in the economy?
Bc Americans want its' involvement in the economy; the government is a protector of the economy, a producer and a consumer, a regulator and a promoter of national goals.
Trade deficit
when imports exceed exports, causes the dollar to become weak
Why is the study of economics important?
Bc it helps make sense of the world around you
Implicit GDP price deflator
index of average price levels
When a major car co. lowers prices how will other car co. react?
They will lower prices as well bc they are a part of an oligopoly.
For most products and services an increase in price causes
a decrease in demand
Businesses are engaging in eCommerce because
it has low overhead
When fewer products are offered at each price level
the supply curve shifts to the left
Since colonial times, the census has revealed that the population is
growing but the rate at which it's growing is declining shows that population is growing in the west an south and declining in north and east.
Decision making grid
used for people to consider the various trade-offs of a problem/situation.
Capital goods
manufactured goods that are used to produce other goods
Revenue tariffs
used to generate revenue for the government without prohibiting imports.
Demand pull theory
inflation is caused when all sectors of the econ. buy more goods then the economy can produce causing shortages and prices to go up.
Liabilities
debts and obligations that a bank has, they are listed on banks balance sheet
Federal Reserve System
established 1913
Factors that affect consumer tastes
Advertising,fashion trends, and new products.
What are the characteristics of allocation by rationing?
It causes high administration costs and diminishing incentives.
Federal Open Market Committee does what?
Deals with the nation's open market operations and working with interest rates and controlling money supply.
How do you determine GNP?
The dollar value of all final goods,services, and structures produced in one year with labor and property supplied by a countries resident's.
When Congress reformed the thrift industry in 1989 what was the legislation that occurred?
Abolished independence of saving and loan industries from government.
When a modest price increase has little of no effects on sales, the demand for this product is called?
Inelastic
Unlike politicians, the Fed is supposed to ?
Make decisions that affect the country in a positive way
Profits are maximized when Marginal Revenue?
Change in total Revenue / Marginal Product.
When a manufacturer reduces prices by 30% and profits decline by 30%, the product is
Inelastic
The Clayton Anti-Trust Act established what?
It gave the government more power to prevent monopolies.
What is the name of the market based, anti-poverty program that encourages work?
Welfare
The theory of competing prices tell us what about the market?
Tells us ideal outcomes and conditions
NAFTA proposed free trade between which countries?
U.S., Mexico, and Canada
The FDIC was established to do what?
File reports so shareholders and competitors would no how the bank is doing
Rent payments and property taxes are what kind of costs?
Fixed cost or overhead
What is the economic term when some necessities have little value and non-necessities have a higher value?
That those produces are elastic and inelastic.
In the short run, an increase in the money supply results in what?
Too much spending
Money,tools and equipment for production is called what?
Factors of Production
The dollar value of all final goods services and the most comprehensive measure of production output is called what?
Capital goods
How often do we take a census?
Every 10 years
A consumer willingness to replace a costly item with a less costly one is called what?
Substitutes
When a bank is about to collapse, how are shareholders protected?
Through programs like the FDIC
What are assets?
Properties,possessions, and claims on others.
When a companies employees are being inefficient, the firm is operating at what stage?
Less than full employment
A decrease in competition within an Industry can result in what?
Price increases for a product
When a business doubles the price of a product in order to increase profits, what is most likely to happen?
Demand will decrease
In order to monetize the debt occurred by a deficit during the Vietnam War, what happened to money supply?
Money supply stopped growing
characteristics of money
Scarcity, durability, portability, divisibility, and limited availability
The Smoot-Hawley Tariff of 1930 resulted in what?
Price of imports rose almost 70%
What was the problem with continental dollars?
They were not backed by gold and silver and so many were printed they were basically worthless
What are the characteristics of competition?
Large # of buyers & sellers; deal in Identical products;act independently; informed of products and prices; free to enter, conduct, or get out of business.
Mergers and acquisitions can result in what?
Monopolies
What is the name of the international agency that administers trade agreements?
WTO
An increase in camera price results in decrease of demand for film, the 2 products are what?
Complements
For a bank to be profitable, how much of a spread on interest rates be?
6%
Concept of division of labor is a characteristic of what?
Productivity
Saving and loans are ensured by who?
FDIC
Tariffs & quotas can cause what type of effect?
Can cause a raise in prices of international products.
Economic growth benefits the gov. by doing what?
Provides more exports
What economic model represents the concept of opportunity cost?
Decision making grid
What is the largest sector in macroeconomics?
agricultural
The business cycle since WW2 is characterized by what?
expansion
Devries with born with who?
Baby Boomers
Purpose of the Sherman Anti-Trust Act?
Laid down a broad foundation for maintaining competition
Indirectly the government has improved consumer info through what?
Advertising
Change in technology and consumer tastes can cause what type of unemployment?
structural
Businesses total cost is the sum of what?
Sum of the fixed and variable costs
$ Loses its value when what occurs?
Money supply grows
When a customers need for a product is not immediate, demand is what?
Elastic
Fixed exchange rate the value of a country's currency is determined by what?
A currency's value is matched to the value of another single currency
Balance sheet shows what?
Shows all assets and liabilities
What marked the beginning of the great depression?
Stock market crash
Local banks in the 1800's that printed too much $ were called what?
Wildcat banks
What caused the growing income gap in America?
Lower wages, education level, declining unionism, changing structures of the American family.
The federal minimum wage laws demonstrate what for society?
Equity and protection
Supply for a product decreases if what happens?
Demand increases
What essentially can move the market supply curve?
Costs of inputs,productivity,technology, taxes and subsidies,future expectations, government regulations & number of sellers.
How is the federal reserve system organized?
Private ownership,board of governors,federal reserve district banks, federal open market committee, advisory committees.
What does a protectives tariff do?
Tax on imported products designed to protect less efficient domestic producers
40% of the population with the lowest income control what % of wealth?
%80
Fed refers to M1, in the money supply, what are they talking about?
Coins, currencies,checks,other demand deposits, and traveler's checks.
Unemployment that is directly related to the business cycle is called what?
cyclical
supply
the amount of a product that would be offered for sale at all possible prices that could prevail in the market
demand
the quantity of a good or service that consumers are willing and able to buy
census
a period count of the population
Relationship between money supply and interest?
when money supply grows, interest declines
conditions of competition
1. many buyers and sellers 2. similar products 3. free entry and exiting of the market 4. knowledge of the market
flexible exchange rates
Exchange rates that are determined by the market forces of supply and demand. They are sometimes called floating exchange rates.