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56 Cards in this Set

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What is Scarcity?
Wants are greater than resources.
What are productive resources?
Provide the means of satisfying wants.
What are the 4 broad categories of productive resources?
Natural resources (Land)
Human resources (Labor)
Capital resources (Made by ppl)
Entrepreneurial ability
What are intermediate goods?
Goods that have been produced and are used up in the production of another good.
(They become a part of the finished good.)
What are economic wants?
Non-ending list of wants in our society.
What are goods?
Things we can use and buy.
Merchandise we buy or personal property we already own.
What are services?
Intangible activities we purchase and use.
Ex: Education, appliance repairs, dry cleaning, etc.
What is the PACED decision-making model?
1.) Define the Problem
2.) List Alternative choices
3.) State Criteria
4.) Evaluate Alternatives
5.) Make a decision
Objective: Identify opportunity costs.
What is a tool that students can use to help them implement the PACED model?
The decision-making grid.
What does criteria mean?
Standard upon which a decision is based.
What are alternatives?
Choices available to the decision-maker.
What is a constraint?
Only so much time in any given day.
Elementary education--teaching the subjects and how there is only so much time.
What does teh first law of economics, "There is no such thing as a free lunch" mean?
Satsify wants in most efficient way.
What is opportunity cost?
What you give up when you make a decision or second choice.
Real cost.
What is a trade-off?
Giving up some of one thing to get some of another thing.
What are the basic questions every society must answer?
1.) How many goods and services will the economy decide to produced?
2.) What goods and services will be produced?
3.) And for whom will the goods and services be produced for?
Why must every society anser the basic economic questions?
To see how many good and services they must produce and how many resources they will use.
What determines the type of economic system a society has?
The availability of resources/ The production-possibilities curve.
What is an economic system?
The way society organizes the production and distribution of goods and services.
What is a market system?
-Answers the basic economic questions in the market place.
-A set of conditions under which consumers and producers buy and sell goods, services, and resources.
What is the circular flow model?
Presents real money flows of a market system or price system.
Who owns teh resouces in a market economy?
Business because they are consumers.
Who owns resources in a comman economy?
The government.
What are some elements of command and tradition in the U.S. economy?
-Traditioally women were school teachers and most kids back in the day used to follow in their parent's foot steps.
-Federal, state, and local government makes decisions about public goods and services to be produced in our economy.
What are the income payments earned for providing resources in resource markets?
Taxes
What is full-employment?
A situation in which an economy's available resources are fully utilized.
What is economic growth?
A long-run economic goal concerned about the future health of the economy.
What can a society do to help achieve economic growth?
Preserve their natural resources and enviornment.
How does the federal government provide economic security?
By distributiong g/s effieciently, and also not leting anything that will harm the welfare of the general public (Drugs, etc.)
What is price stability?
Occurs when there is an absence or very low rate of inflation.
What is inflation?
When money isn't worth as much.
What is deflation?
A fall of general price level or available
How is inflation/deflation measured?
consumer price index
What is a command economy?
An economic system in which decisions about production and distribution are made by a central planning unit, such as the governement.
What are some elements of command and tradition in the U.S. economy?
traditionally women were school teachers or kids followed their parents professions
and federal, state and local government makes decisions about public goods and services to be produced in our economy.
What are the income payments earned for providing resouces in resource markets?
trade-offs
What is a discouraged worker?
Looking for work and stopped.
What is an underemployed worker?
Someone who has a high degree and cannot get a good job.
Ex: Pharmacist working at walgreens
Why is the U.S. economy mixed but primarily a market economy?
because the U.S. is a trading country and relies on the market to keep our economy going.
What percent of economic activity in the U.S. takes place in the market?
70%
What is barter?
To trade g/s without money.
Ex: Class example with cows and seashells
Wht are the difficulties of barter?
It depends on what the other person finds valuable and what they want to trade you with.
What are the tools of the Fed?
1.) Reserve requirement (rarely changed)
2.) Discount rate ("Lenders of last resort")
3.) Open market operations
How would the Fed use its tools to combat inflation? recession?
-Fed would put word out to businesses that securities will be bought to get money to the economy and opposite with recession.
What is the federal reserve system?
Nation's central bank.
What is the federal reserve system's mission, primary responsibilities and functions?
-Control ammount of money in economy, help U.S. economy by meeting economic goals (Primary responsibilities)
-Fed mission: Conduct monetary policy
-Functions: Control money supply, supervise money and banking, terms are staggered
How is the federal reserve system organized?
Board of Govenors elected by Pres. and confirmed by senate.
What are the tools of the Fed?
1.) Reserve requirement (rarely changed)
2.) Discount rate ("Lenders of last resort")
3.) Open market operations
How would the Fed use its tools to combat inflation? recession?
-Fed would put word out to businesses that securities will be bought to get money to the economy and opposite with recession.
What is the federal reserve system?
Nation's central bank.
What is the federal reserve system's mission, primary responsibilities and functions?
-Control ammount of money in economy, help U.S. economy by meeting economic goals (Primary responsibilities)
-Fed mission: Conduct monetary policy
-Functions: Control money supply, supervise money and banking, terms are staggered
How is the federal reserve system organized?
Board of Govenors elected by Pres. and confirmed by senate.
What is the role of banks in the economy?
Accepy deposits and make loans
What is the money supply?
Travlers checks, checkable deposits, shared drafts, paper money in circulation
What are the functions of money?
1.) Medium of exhange ( Makes faster exchange)
2.) Characteristics (Ex: durable, visible, etc.)
3.) Store of value ( hold savings for future)
Who is the chairman of Board of Govenors?
Bernanke