| A | B |
|---|
| Can't satisfy all wants at same time | SCARCITY |
| Used in the production of goods and services | RESOURCES |
| Four types of resources | NATURAL, HUMAN, CAPITAL, ENTREPRENEURSHIP |
| Given up when a choice is made | OPPORTUNITY COST |
| The interaction of supply and demand determines this | PRICE |
| Used to change economic behavior | INCENTIVES |
| Amount consumers can and will buy at a certain price | DEMAND |
| Amount producers can and will sell at a certain price | SUPPLY |
| Making goods or providing services | PRODUCTION |
| Using of goods and services | CONSUMPTION |
| Determines what is purchased | CONSUMER PREFERENCE AND PRICE |
| Three major economic systems | FREE MARKET; COMMAND ECONOMY; MIXED ECONOMY |
| System with the least government involvement in economic decision making | FREE MARKET |
| Centrally-planned economy; lack of consumer choice | COMMAND ECONOMY |
| Most common economic system | MIXED ECONOMY |
| Five characteristics of the U.S. economy | FREE MARKETS; PRIVATE PROPERTY; PROFIT; COMPETITION; CONSUMER SOVEREIGNTY |
| Markets that are allowed to operate without undue interference from the government | FREE MARKETS |
| Earnings after all expenses have been paid | PROFIT |
| Benefits of competition | BETTER GOODS AT A LOWER PRICE |
| In the U.S., they determines through purchases what will be produced | CONSUMERS |
| One owner takes all the risks and all the profits | PROPRIETORSHIP |
| Two or more owners share the risks and the profits | PARTNERSHIP |
| Owners share the profits. Owner liability is limited to investment. | CORPORATION |
| A person who takes a risk in search of profit | ENTREPRENEUR |
| Needed to provide public goods and services | TAX REVENUE |
| Private financial institutions | BANKS, SAVINGS AND LOANS, CREDIT UNIONS |
| What banks get and give | DEPOSITS AND LOANS |
| Worldwide markets, buying and selling by all nations | GLOBAL ECONOMY |
| Why nations trade | TO BUY AT A LOWER COST, TO SELL AND CREATE JOBS |
| Environmental Protection Agency | EPA |
| How the government promotes marketplace competition | ANTITRUST LEGISLATION; GLOBAL TRADE |
| Federal Communications Commission | FCC |
| Three government agencies that oversee business | FCC, EPA, FTC |
| Some public goods and services | INTERSTATE HIGHWAYS, POSTAL SERVICE, AND NATIONAL DEFENSE |
| Where Congress gets the authority to tax | 16th AMENDMENT |
| Ways the government can influence the economy | TAXING, BORROWING AND SPENDING |
| Federal Trade Commission | FTC |
| A result of more government spending | MORE JOBS |
| A result of decreased government spending | ECONOMY SLOWS DOWN, FEWER JOBS |
| How the FED increase the money supply | BY LOWERING THE DISCOUNT RATE AND RESERVE REQUIREMENT |
| The FED | FEDERAL RESERVE SYSTEM, CENTRAL BANK |
| What the FED regulates | MONEY SUPPLY |
| When the FED restricts the money supply, what happens? | INTEREST RATES RISE |
| How the Fed can slow the economy | BY RESTRICTING THE MONEY SUPPLY, RAISING INTEREST RATES |
| How the FED can stimulate the economy | BY INCREASING THE MONEY SUPPLY |
| Protects private property | NEGOTIATED CONTRACTS |
| What employers want | A STRONG WORK ETHIC |
| Higher education and skills results in this | HIGHER INCOMES |
