Test 1

Question 0

Macroeconomics

Answer 0

Study of the economy as a whole or a major subdivision

Question 1

Economics

Answer 1

The study of the allocation of scarce resources among unlimited wants

Question 2

Microeconomics

Answer 2

The behavior of individual businesses or individual consumers as they decide how best to use available resources

Question 3

What is the major economic problem

Answer 3

Scarcity

Question 4

10 principles of economics

Answer 4

1. People face trade offs
2. The cost of something is what you give up to get it
3. Rational people think at the margin
4. People respond to incentives
5. Trade can make everyone better off
6. Markets are usually a good way to organize economic activity
7. Governments can sometimes improve market outcomes
8. A country’s standard of living depends on its ability to produce goods and services
9. Prices rise when the government prints more money
10. Society faces a short run trade off between inflation and unemployment

Question 5

5 Factors of Production

Answer 5

1. Land
2. Labor
3. Capital
4. Entrepreneurship
5. Technology

Question 6

Land

Answer 6

All natural resources

Question 7

Labor

Answer 7

All human inputs into production with the exception of entrepreneurship

Question 8

Capital

Answer 8

All man made aids of production

Question 9

Entrepreneurship

Answer 9

When a person takes the initiative to organize the factors of production and bears the risk and earns the profits or the losses

Question 10

Technology

Answer 10

The knowledge of how best to use the other factors of production

Question 11

4 Basic Economic Questions

Answer 11

1. What should be produced?
2. How much should be produced?
3. What methods should be used?
4. How should goods and services be distributed

Question 12

Circular Flow Diagram

Answer 12

A visual model of the economy that shows how money flows through markets among households and businesses

Question 13

Adam Smith

Answer 13

Wealth of Nations

Question 14

Market System Foundations

Answer 14

1. Private Property
2. Choice/Economic Freedom
3. Voluntary Exchange
4. Pure Competition
5. Economic Incentives

Question 15

Private Property

Answer 15

Owned by individual/business

Question 16

Choice/Economic Freedom

Answer 16

People can make choices in their own best interest

Question 17

Voluntary Exchange

Answer 17

Trade where both buyer and seller must feel that they will both benefit from item of trade

Question 18

Pure Competition

Answer 18

Industry with plenty of businesses, no one business is dominant

Question 19

Economic Incentives

Answer 19

Positive and negative stimuli that guide resources into the production of goods and services that people want most

Question 20

Opportunity Cost

Answer 20

Whatever must be given up to obtain something

Question 21

2 Things That Can Have a Great Effect On Economy

Answer 21

1. Change in resources

2. Change in technology

Question 22

Command Economy

Answer 22

An economic system where the government makes most of the economic decisions

Question 23

Market Economy

Answer 23

Based on private ownership, property, competition, and the profit motif

Question 24

Traditional Economy

Answer 24

Custom and tradition are used to answer economic questions

Question 25

What is the role of government in the free enterprise system?

Answer 25

1. Safe guards the market system through anti-trust laws 2. Provide public goods and services (roads, police,etc.) 3. Deal with externalities (pollution,etc.) 4. Assist those in need 5. Help specific groups 6. Stabilize the economy

Question 26

World Economic Systems

Answer 26

1. Capitalism 2. Socialism 3. Communism

Question 27

Socialism

Answer 27

An economic system where the government owns part of the means of production

Question 28

What are the goals of Socialism?

Answer 28

1. The redistribution of wealth | 2. Protection from low wages (Minimum wage laws)

Question 29

Communism

Answer 29

The government owns all of the means of production Based on the idea of Economic Determinism Dictatorship of the proletariat

Question 30

Economic Determinism

Answer 30

Everything is determined by economics

Question 31

Goal of Communism

Answer 31

Creation of a classless society

Question 32

Karl Marx

Answer 32

Published Communist Manifesto

Question 33

Karl Marx and Frederich Engles

Answer 33

Published Capital

Question 34

Bourgeoisie

Answer 34

Middle and Upper Class

Question 35

Proletariat

Answer 35

Lower Class

Question 36

Russian Communism begins with what

Answer 36

The Revolution of 1917

Question 37

Who led the Revolution of 1917

Answer 37

Vladimir Lenin and the Bolsheviks

Question 38

What did War Communism do?

Answer 38

1. Abolish private property (Confiscate property of the wealthy and gave it to peasants) 2. Government took over all of the companies 3. Forced workers to relocate 4. Confiscated food from farmer to feed people in the city and the army

Question 39

Lenin introduces the NEP which stands for what

Answer 39

New Economic Policy

Question 40

Who followed after the death of Vladimir Lenin?

Answer 40

Joseph Stalin

Question 41

What does Stalin start?

Answer 41

Central Planning

Question 42

What is Central Planning?

Answer 42

The government plans the economy

Question 43

5 Year Planning

Answer 43

They emphasize parts of the economy for 5 years at a time

Question 44

What do they focus on for the first 5 years?

Answer 44

Heavy Industry and Collective Farms

Question 45

What happened with Central Planning?

Answer 45

Industry increased but farms failed because there was a lack of necessity (people didn't care enough) There was a shortage of the smaller things

Question 46

Chinese Communist Leader

Answer 46

Mao Zedong

Question 47

What are the rules of Chinese Communism?

Answer 47

1. Abolished private property | 2. Followed a 5 Year Plan

Question 48

Chinese 5 year plan

Answer 48

Focus on Heavy Industry

Question 49

Chinese Cultural Revolution

Answer 49

Violent movement that 1. Killed royal families 2. Destroyed temples, libraries, etc. 3. Sent people to re-education camps

Question 50

Who began the 4 Modernizations

Answer 50

Deng Xiaoping (followed after Mao Zedong's death)

Question 51

Chinese start introducing what?

Answer 51

Capitalism and encouraged Foreign Investments

Question 52

How will they accomplish the 4 Modernizations

Answer 52

Sent their people to American and Canadian education systems to learn and modernize their own country