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Terms in this set (47)
In a market economy, how are economic decisions made?
Consumers & the market
What economy is determined by cultural groups?
Economies always ask what three questions?
What to produce?, How to produce?, & For Whom to produce?
A system for changing from one type of currency to another is called
A tax on an imported good is called
Why do most economies in the world today operate somewhere in between a market economy and a command economy?
Most economies have found they need a mix of free market & some government control to be successful & protect consumers.
Tariffs are a useful trade barrier if the Government of the country placing the tariff wished to achieve which goal?
Increasing tax revenue on imports.
Why would one country place an embargo another?
Why does economic specialization make trade between countries easier?
Countries can produce those things they make best & trade with others for what they need.
Why is it important for nations to have a system to convert from one currency to another?
This makes it possible to buy & sell goods between nations with different types of money.
Before a spending budget can be created, what piece of information MUST be known?
A person's income.
What is associated with a high gross domestic product (GDP)?
A high standard of living.
If country does not invest in its human capital, how can it affect the country's GDP?
GDP may go down because of poorly trained workers will not be able to do their jobs.
Why are most modern economies referred to as mixed economies?
Most countries have all aspects of the three economic types at work in their economies.
How does voluntary trade help the economy?
It encourages specialization & usually means more profit.
What country's businesses are under the most government control?
The ability to borrow money is called
When firms invest money in equipment, factories, or real estate that is called
When an individual invest money in bank accounts, certificates of deposit or mutual funds, it is called
a financial investment
Why is specialization so valuable in international trade today?
It allows people to do a more efficient job at producing what they make best & trade for the things they need.
How could a high tariff on imported grain help the people in the country charging the tariff?
Local farmers would be able to sell their grain since it would be cheaper than imported grain.
What is a plan for saving and spending called?
What is the definition of savings?
Money left over after buying what is needed & wanted.
In a command economy, how are economic decisions made?
Both parties in the transaction see that they will be able to gain something from the exchange is
In a traditional economy, how are economic decisions made?
custom and habit
It is a free market economy where people own their businesses & property is called
What economy is determined by the people?
What economy is determined by the government?
Factories, machines, & technology that people use to make product to sell is
The product a county makes best & that are in demand on the world market is
A way of limiting the amount of foreign goods that can come into a country is called
The knowledge & skills that make it possible for workers to earn a living producing goods/
services is called
What economy is a mixture of all three of economies?
A suspension of trade is called
A measure of the quality of life based on such things as ownership of material goods is called
standard of living
When a country has very little or none of certain resources it is known as
It is what is given up when the alternative choice is not selected is called
A person who takes a risk of organizing & running a new business is called a (n)
The total amount of goods & services that a country produces in a year is called
When comparing the economic systems of South Africa and Nigeria, which is correct?
Both countries have mixed economies that are closer to market than command.
Nigeria's currency is known as the naira while South African's use a different currency known as the rand. How will this affect trade between the two countries?
They must find a system for exchanging currencies in order to trade
Many major industries in Saudi Arabia have significant government involvement or are government controlled. Based solely on this information, which type of economic system would BEST describe Saudi Arabia?
Turkey, like most countries, has much economic freedom, but also a large amount government involvement in the economy. What term describes this economic system?
According to the normal relationship, if Iran decided to invest several billion dollars in education and training, how would their GDP likely be affected?
It would increase
Countries in Southern and Eastern Asia have resources and materials which allow them to produce a certain set of goods that they specialize in. What happens as a result of this specialization?
Specialization in producing a set of goods encourages trade between countries.
India's GDP impressively increased 9.2% from 2006 to 2007. This fact supports which statement about India's workforce?
Since the 1990s there has been an increase in spending on education and training.