| A | B |
|---|
| How does government promote individual initiative in the free enterprise system? | copyrights, patents, protecting private property |
| What term is defined as "a general increase in price levels"? | inflation |
| What type of market only has one supplier of a product? | monopoly |
| What type of market is characterized by only a few suppliers who sell a nearly identical product? | oligopoly |
| What type of market has many different suppliers who produce a similar product? | competitive market |
| What is it called when two firms combine their business operations to form one company? | merger |
| What type of business has the disadvantage of having unlimited legal liability? | sole proprietorships and partnerships |
| What type of business is owned by its shareholders? | corporation |
| What is it called when a person makes a profit by selling shares of stock at a higher price than they paid for them? | capital gain |
| What is it called when a corporation pays out a percentage of its profit to its shareholders? | dividend |
| What type of organization helps workers to acquire higher wages, benefits, and better working conditions? | labor unions |
| What process do labor unions use to negotiate with the owners/management of a business? | collective bargaining |
| What is it called when labor union members refuse to work until its demands are met by the business management? | strike |
| What is it called when the business management refuses to let labor union members go to work until they accept they contract that they are offering? | lock-out |
| Which legislation officially recognized the right of labor unions to organize and use collective bargaining? | National Labor Relations Act |
| Which act limits labor unions by allowing states to pass "right to work" laws? | Taft-Hartley Act |
| What rights do workers have under the Fair Labor Standards Act? | minimum wage and 40-hour work week |
| Which type of financial institution is most important in the American economy? | commercial banks |
| How do banks make a profit? | charging interest to borrowers |
| What do individuals buy to protect their property and assets from accidents and liability? | insurance |
| What are laws that prohibit companies from restricting competition called? | Anti-trust laws |
| Where do banks acquire the money that they use to make loans? | deposits |
| Which government agency insures individuals' bank deposits | Federal Deposit Insurance Corporation (FDIC) |
| What forms of money are considered to be "legal tender"? | currency (notes and coins) |
| What is an item of value called that is pledged in order to secure a loan? | collateral |
| What figure is used to inform a borrower of the total annual percentage cost of a loan or other form of credit? | annual percentage rate (APR) |
| What form of money can be used to purchase something now and pay for it later on a monthly basis? | credit |
| What type of financial institution exists to provide services only to depositors who are members? | credit union |
| What is the disadvantage of using credit? | increased debt |
| What economic indicator is defined as “the dollar value of all final goods and services produced in a country in one year”? | Gross Domestic Product (GDP) |
| What phase of the business cycle is characterized by a growing GDP and low unemployment? | expansion |
| Which phase of the business cycle is characterized by a decline in GDP and rising unemployment? | contraction or recession |
| What economic indicator measures the percentage of jobless individuals over the age of 16 who are looking for work? | unemployment rate |
| Which economic indicator is used to measure inflation? | Consumer Price Index (CPI) |
| What is it called when a nation experiences a long and severe recession? | depression |
| What is it called when a government’s expenditures are greater than the revenue it receives? | budget deficit |
| Increased government spending and higher budget deficits result in which economic problem? | national debt |
| What type of tax is the U.S. income tax? | progressive |
| What type of tax is the sales tax? | regressive |
| What do payroll taxes pay for? | Social Security and Medicare |
| What is the primary source of revenue for the federal government? | personal income taxes |
| Who pays the most in federal income taxes? | people with higher incomes |
| Who is affected the most by sales taxes? | people with low incomes |
| What type of tax is hidden in the price of a good such as alcohol, tobacco, or gasoline? | excise tax |
| What is measured by per capita GDP? | standard of living |
