Asian Latin American Studies - ECONOMICS
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- Define and Explain an Economic System
- A nation has RESOURCES which are turned into GOODS & SERVICES (called PRODUCTION) and they are given to the PEOPLE (DISTRIBUTION) who use them (CONSUMPTION)
- What are the four parts (in order) of the business cycle?
- Peak, Recession, Depression, Recovery
- During the "peak" of the business cycle, what are the statuses of the economic indicators: GDP, CPI, and unemployment?
- GDP is up, CPI is constant, unemployment is down
- During the "recession" of the business cycle, what are the statuses of the economic indicators: GDP, CPI, and unemployment?
- GDP is slowly going down, CPI has a little bit of change, and unemployment is slowly rising
- During the "depression" of the business cycle, what are the statuses of the economic indicators: GDP, CPI, and unemployment?
- GDP is WAY down, CPI is changing a LOT, and unemployment is at an all-time low
- During the "recovery" of the business cycle, what are the statuses of the economic indicators: GDP, CPI, and unemployment?
- GDP is slowly going up, CPI goes back to a little bit of change, and unemployment is going down slightly
- Define "the purchasing power of the dollar" and what effects it. (PP$ for future reference)
- Definition: What a dollar can buy / how much it's worth; it is affected by inflation and deflation, and the supply available
- Describe Inflation: the effects on the prices, the PP$, the people's reaction, and the government's reaction
- Prices go up, PP$ goes down, people buy on credit and continue to spend money, and the goverment therefore increases taxes and interest rates
- Describe Deflation: the effects on the prices, the PP$, the people's reaction, and the government's reaction
- Prices go down, PP$ goes up, there is a surplus of goods because nobody is buying things - people get laid off and save their money, and the government in turn lowers taxes and interest rates (as a last resort, they will also make more jobs available)
- Define the Economic Indicator: "CPI"
- Consumer Price Index: price changes for consumers w/in a year
- Define the Economic Indicator: "GNP"
- Gross National Product: total g/s produced BY a nation w/in a year
- Define the Economic Indicator: "GDP"
- Gross Domestic Product: total g/s produced W/IN a nation w/in a year
- Define the Economic Indicator: "GDP per capita"
- Gross Domestic Product per person: production rate of each person in a nation - found by dividing the GDP by the population of a nation
- Define the Economic Indicator: "unemployment"
- the number of people w/out jobs WHO WANT ONE (aka, people who are unemployed but do not want jobs are excluded from this statistic)
- What is the difference between "GDP" and "GNP"
- Gross domestic product is w/in a nation, but gross national product includes locations owned BY the nation, but is not limited to them... aka, locations owned by the USA but are located in countries other than the US are included in GNP but NOT in GDP
- What are the three basic economic problems (questions asked)?
- What goods and services are to be produced, how are they to be distributed, and to whom are they to be distributed?
- What are the 3 types of Economic Systems?
- Traditional, Market, and Command (Edict)
- What are the 7 functions of the Federal Reserve?
- Protect $, Regulate $ supply, Give $ to the economy, Provide a system for check clearing, Supervise member banks, Lender of last resort, Banker for the government
- What is the FDIC, what does it do, and who is the president of it?
- Federal Depository Insurance Corperation: guarantees money will be in the bank for you, and Ben Bernnacki is the president of the company.
- Define "laissez faire" and tell which of the two main parties of the US use / support this concept
- "let it alone:" Democrats do NOT support this idea. Republicans DO - taxes go down with this party, and the people are let to do what they need.
- Give a few reasons why economies trade.
- You may have something like: variety (to get more stuff :-D), necessity / to meet the demands of the people, to boost the economy, and to help form alliances. This last one is rather important and you might want to know it.
- Define this trading term: quota
- a limit on imports
- Define this trading term: imports
- goods coming into the country
- Define this trading term: exports
- goods going to other nations
- Define this trading term: tariff
- a tax on imports
- Define this trading term: WTO
- World Trade Organization: sets standards for trading
- Tell the 3 members of NAFTA (and tell what NAFTA stands for)...
- North American Free Trade Association: 3 members are Canada, Mexico, and the US
- What was the purpose of NATO, when was it established, and what does it stand for?
- North Atlantic Treaty Organization: 1948 to stop the spread of "agression" (actually communism)
- Define this trading term: OPEC
- Organization of Petroleum Exporting Countries: controls oil trade
- What two purposes does a corperation have to have in order to exist?
- Stock and State Charter (employee and consumer fairness)
- What are the 4 factors of production?
- Labor, Capital, Land, and Management
- Define: Economics
- the social science studying the production, distribution, and consumption of goods and services
- When you think market system, what words pop into your mind?
- You should be thinking: choices, competition, and risk.
- When you think command or edict system, what words pop into your mind?
- You should be thinking: order, government, and control
- In a traditional economic system, what primary activity is the system based around usually?
- Farming and agriculture. Possibly hunting.
- Which of the three types of economic systems is MOST susceptible and accepting to change?
- Market
- Which of the three types of economic systems is LEAST susceptible and accepting to change?
- Traditional
- Which way does the demand curve always go: up or down?
- down
- Which way does the supply curve always go: up or down?
- up
- What is the name of the point where the supply curve and the demand curve intersect?
- The Equilibrium Point
- What is the Law of Supply?
- as prices increase, producers are willing to produce more in order to make more $
- What is the Law of Demand?
- as prices increase, consumers buy less
- What should the Consumer Price Index be near all the time to reduce inflation or deflation?
- 100. 100 is the perfect spot and is the "start number" or "index"