| A | B |
|---|
| Def: Gross Domestic Product | Market value of all final products. produced in one year. |
| What was the GDP of the U.S. in 2015? | 15 trillion dollars. |
| What was the GDP of China in 2015? | 11 trillion dollars. |
| What can the GDP be used to measure? | It can be used as a way to measure a country's income. |
| What are the four factors of production? | 1) Natural Resources; 2) Labor; 3) Capital; 4) Entrepreneurs. |
| Def: GDP Per Capita | Total GDP divided by the number of people. |
| List the two components of the "Circular Flow of Economic Activity" | 1) Economic Growth; 2) Productivity |
| Def: Economic Growth | 1) Increase of productivity; 2) GDP increase means economic growth |
| What has the U.S. economy always had? | The U.S. has always had a "Consumer Based Economic" |
| What are the three components of "Productivity"? | 1) Specialization; 2) Division of Labor; 3) Human Capital |
| What are three aspects needed in "Human Capital"? | 1) Knowledge; 2) Skills; 3) Experience |
| What are the six factors "Free Enterprise / Capitalism" | 1) Economic Freedom; 2) Markets; 3) Voluntary Exchange; 4) Profit Motive; 5) Competition; 6) Private Property Rights. |
| What are some of the origins of the "U.S. Economy"? | 1) Adam Smith - "The Wealth of Nations" 2) Adam Smith's belief in a "Laissez-faire"; 3) Many of the U.S. founding fathers read and believed in Adam Smith's economic philosophy. |
| Def: "Laissez-faire Economics" | Adam Smith's belief that the government needs to keep itself out of the economy and leave it in the hands of the people. |
| Def: "Public Sector" of the economy | It is the part of the economy where the "government" spends money and regulates. |
| Def: "Private Sector" of the economy | It is the part of the economy where their is non-government spending; such as, where the people buy and sell. |
| What are "Private Goods"? | Things people purchased to use; such as, a cellphone |
| What are "Public Goods"? | These are thing the government spends money on; for example, Roads, sidewalks and brigdes. |
| What does the government do to try to protect and maintain competition? | The government tries to prevent monopolies. |
| Def: "Monopolies" | A monopoly is where one business owns an entire market for a product; for example, if there was no other car manufacturer in the U.S. for cars other than the Ford Motor Corporation. |
| Def: "Anti-trust Laws" | These are government laws whose purpose is to prevent monopolies. |
| Name 4 important "Anti-Trust Laws" passed by the Federal government in Washington. | 1) Sherman Anti-Trust (1890) 2) Clayton Anti-Trust Law (1914); Standard Oil (1911); 4) AT&T (1980) |
| Can the government block mergers? | Yes, when the mergers create monopolistic conditions on a market.q |
| Def: "Merger" | Mergers are when two or more companies join together as one in a given market. |
| Def: "Natural Monopolies" | When one company can produce and distribute a product better than the multiple companies can (This is the company not having to merger to form the monopoly, but it just happens). |
| Def: "Regulation" | This is when the government sets up rules and regulations against monopolies. |
| Def: "De-regulation" | This is when the government "takes away" rules and regulations against monopolies. |
| Where does the government get most of its money? | Taxes |
| What are three government agencies that protect consumer Health and Safety? | 1) Food and Drug Administration (FDA) 2) Center for Disease Control (CDC) 3) Consumer product Safety Commission (CPSC) |
| Def: "Recession" | It is when the GDP drops for at least 6 months. |
| What years were the Great Depression? | It was a 10 year period, between 1929-1939. |
| What two things have the government done to prevent recessions and depression? | 1) The government implemented measures to prevent them in the future; 2) To understand the economic indicators better. |
| Def: "Economic Indicators" | Economic Indicators are such measurements are such things as the GDP and unemployment rate which gives information on health of the economy. |
| What is a special economic indicator? | employment vs. unemployment |
| What is considered a good "employment rate"? | Unemployment rate of 5% or less |
| What economic indicator tracks "price stability"? | Consumer Price Index (CPI) |
| Def" Inflation | Inflation is when prices on goods go up quickly. |
| What is "price stability" referring to? | "Price stability" refers to "inflation - if "inflation" occurs then there is "price instability". |
| What is the purpose of "stock indexes"? | The purpose of the "stock indexes" is to see out how much the stocks in the index is totally worth each day. |
| What are two important "stock indexes"? | 1) Dow Jones Industrial Average; 2) Standard and Poor's 500 |
| Def: Bear Market | A "Bear Market" is when "the prices of stocks are falling" and people sell a lot of stocks. |
| Def: Bull Market | A "Bull Market" is when "the prices of stocks are going up" and people buy a lot of stocks. |
| Def: Poverty | The state of being very poor and not being able to pay for the basic "necessities of life (for example, food; a place to live; cloths; medical expenses, etc.) |
| What are three ways the government tries to help people who are in poverty? | 1) unemployment benefits; 2) Social Security; 3) Medicare |
| Def: unemployment benefits | "Unemployment benefits" is money paid to a person who is unemployed. |
| Def: unemployed | not have a job or work |
| Def: Social Security | Money given by the government to older people who are retired from work and may need extra money to pay their basic necessities in life. |
| Def: Medicare | Medicare is the federal health insurance program for people who are 65 or older and certain younger people with disabilities. |
