Economics Flashcard

Front

Which of the following best describes scarcity?

Back

The demand of goods and services is greater than our resources

Answer explanation

The demand of goods and services is greater than our resources

Front

What are the factors of production?

Back

Land, labor, capital, entrepreneurship

Answer explanation

The factors of production are land, labor, capital, and entrepreneurship. These are essential resources used in the production of goods and services.

Front

According to the law of demand, what happens when prices increase?

Back

The quantity demanded will decrease.

Answer explanation

According to the law of demand, when prices increase, the quantity demanded will decrease.

Front

What is the equilibrium price?

Back

The price at which quantity supplied equals quantity demanded

Answer explanation

The price at which quantity supplied equals quantity demanded

Front

Which of the following is an example of a natural monopoly? A company with a patent, A government-owned utility, A local grocery store, A nationwide retail chain

Back

A government-owned utility

Answer explanation

A government-owned utility is an example of a natural monopoly because it provides essential services like water or electricity with high fixed costs, making it more efficient as a monopoly.

Front

What is collective bargaining?

Back

Negotiation between employers and employees

Answer explanation

Collective bargaining is the negotiation process between employers and employees to reach agreements on working conditions, wages, benefits, etc.

Front

What is the benefit principle of taxation?

Back

Taxes should be based on the benefits received.

Answer explanation

Taxes should be based on the benefits received, which is the core principle of the benefit principle of taxation.

Front

Which of the following is a primary role of money? Investment, Store of Value, Production, Distribution

Back

Store of Value

Answer explanation

The primary role of money as a store of value means it can be saved and used for future purchases, maintaining its worth over time.

Front

What are the tools of fiscal policy?

Back

Taxation and Spending

Answer explanation

The tools of fiscal policy include Taxation and Spending, which are used by governments to influence the economy through revenue collection and expenditure.

Front

Which of the following is related to the Money & Monetary Policy unit? Expenditure Model GDP, Unanticipated Inflation, Fractional Reserve Banking System, Supply-Side Economics

Back

Fractional Reserve Banking System

Answer explanation

The Fractional Reserve Banking System is related to the Money & Monetary Policy unit as it involves the process where banks keep only a fraction of their deposits on hand and lend out the rest.