• Shuffle
    Toggle On
    Toggle Off
  • Alphabetize
    Toggle On
    Toggle Off
  • Front First
    Toggle On
    Toggle Off
  • Both Sides
    Toggle On
    Toggle Off
  • Read
    Toggle On
    Toggle Off

Card Range To Study



Play button


Play button




Click to flip

Use LEFT and RIGHT arrow keys to navigate between flashcards;

Use UP and DOWN arrow keys to flip the card;

H to show hint;

A reads text to speech;

37 Cards in this Set

  • Front
  • Back
According to Miller & Benjamin, why do countries with greater political freedom tend to have a greater economic prosperity?
Property rights and institutions are present, as well as a free market system in which everyone who participates benefits.
How are saving and investment linked?
investment can't exist without at some point being a savings. S=I
What is investment to an economist?
Putting money down for production of capital
Is a Ford minivan manufactured in Canada considered to be part of US GDP?
No. GDP describes products specifically built in the US.
What is per capita GDP and what does it tell us?
"per person" GDP, it gives us a better perspective not he standard of living
According to Heilbroner, give 1 example of how technological change has affected society.
*Sociological effects
Why has the labor force participation rate increased over the past fifty years?
A rise in participation of women due to the other circumstances like advancement in learning, contraception...etc.
What are economies of scale and how do they affect production?
Larger production = smaller cost
produce incentive to engage in large scale production
What is the main idea of Bruce Bartlett's "Underground Dwellers"?
Underground economy-or under the table work-is not seen in GDP and is growing due to high taxes
Are textbooks sold at Flagler bookstore part of GDP?
No! Books aren't being produced
Price paid by German tourist when staying at a NY hotel part of GDP?
Yes! In US and produced by US.
Are Cars made at a GM factory in Germany part of GDP?
No! Not made in the US
Is the price paid by an American tourist staying at a Berlin hotel part of GDP?
No! Not in US and not directly benefitting US.
Are trucks made at a Toyota factory in Alabama part of GDP?
Yes! Made in the US
What is the free market?
people are permitted to buy and consume without government interference
What is used to calculate GDP using national expenditure approach?
Gross Private Investment (I)
Net Exports (NX) or (exports - imports [x-m])
Government Purchases (G)
Household Consumption (C)
What is the rule of 70?
Determines how long it takes for money to double. 70/rate of growth
ex: 7%-70/7
Population = 30M, only 200M are at least 16y.o. & not institutionalized, 50M of the 200M aren't working/looking for work, 10M of the 200M are looking but can't find work.
-unemployment rate?
-labor force participation rate?
-6.6% (10M/150M) (looking but can't find/working)
-75% (150M/200M) (looking but can't find work+working/able to work)
If you inherit $10K this year and invest your money so that it grows 7% each year, how many years will it take for your investment to be worth $20K? $40K? $160K?
a. 10 years (70/7=10)
b. 20 years
c. 40 years
How does a market society prevent self-interested, profit hungry meant from holding up their fellow citizens for ransom?
Competition-every person is out to do the best for themselves, facing similarly motivated people, eager to take advantage of his competitor's greed-urging the competitor to raise the price above the "set" market level. Ex: Employee asking for more than the going wage won't find work.
I, Pencil
Let the free market do what it does best and don't interfere...as humans we cannot acquire/know/control the production of things/market system-not by ourselves
Intermediate good
not GDP-sold as part of another good- tire on a new car, typically used in production of final goods and services-not direct sources of utility themselves
What motivates individuals in modern America to "mobilize their human energy for productive purposes"?
Incentive is the driving motivation for work- usually incentive to make a profit.
In Economics 101, what is the lesson of 5mph speed limit?
List and define the 3 categories of resources used in an economy to produce goods and services
labor-work, human effort
capital-assests useful in production-usually man made
land-natural resources (crop. water)
What is scarcity in the economic sense?
When people want more of something that is not made readily available
What will happen to the demand curve for Marshmallow fluff if the demand increases?
If the demand for Fluff increases, the demand curve will shift to the right.
If the price of marshmallows rise, the remade for them will decrease-what will happen to the demand for Fluff, it's substitute?
The demand for Fluff will increase
Difference between fiscal policy and monetary policy? Examples?
Fiscal policy changes government spending- +spending -taxing
Monetary policy is changing money supply-adding $ into economy
Evaluate- "Poverty in the US is increasing each year"
The # of people defined as poverty stricken in monetary numbers is growing, but the # of people who are poverty stricken by standard of living is improving.
Outsourcing, bad or good for the US?
beneficial to Americans and those who provide service, other, better US jobs are made available and lower product prices by competition & benefits local businesses
What "ancient fallacy" did Sowell refer to in his article?
Politicians like to create an illusion that good things will be provided, freely and without cost to keep public views of them positive. Ex: price control of gas in Hawaii, not being put into effect until after elections so politician looks better.
Define money and what is included in that. Who creates it and how?
Money = purchasing power-cash, checking accounts, bills...
Federal reserve makes money by buying/selling bonds from the banking system-putting reserves into the banking system
Stagflation? Why does it present a policy dilemma?
When inflation and unemployment are both high.
Causes a dilemma because both fiscal and monetary policy policy can solve only 1 of those problems, but not both.
Describe how goods and services are allocated in a market system
Signals are generated by the market prices
Primary reason socialism can't work in the real world
fails to take into account human nature-
-incentive problem
-information problem
Calculate the tax bill for a person whose income is $50K under the following system

$0-$10K = 0%
$10K-$30K = 10%
$30K-$80K = 20%

Tax paid?
10K = 0% = 0
20K = 10% = $2000
20K = 20% = $4000
= $6000

$6000/50,000= 12=12%