____ 1. Scarcity exists when demand is greater than supply.

____ 2. The production possibilities curve shows how much profit a company can expect to earn from different production possibilities.

____ 3. The kind of system in which the individuals own and control the factors of production is a command economy.

____ 4. In a laissez-faire system, the government does not interfere in the economy.

____ 5. Generic products are usually more expensive than brand-name products.

____ 6. Disposable income is income that people spend on things they don't really need.

____ 7. Consumers have a responsibility to act ethically toward sellers.

____ 8. It is more difficult to obtain an unsecured loan than a secured loan.

____ 9. A debit card is a type of credit card.

____ 10. You should pay your high-interest credit cards first.

____ 11. Treasury bonds and bills are issued by the United States Treasury.

____ 12. Someone who makes a lot of money in the stock market is likely to have heavy capital losses.

____ 13. People diversify their investments by investing in several different kinds of investments.

____ 14. According to the law of supply, producers are willing to supply more when the price of a good or service goes up.

____ 15. According to the law of demand, quantity and price move in the same direction.

____ 16. GDP measures all of the final goods and services produced in a country and made available for purchase in a given year.

____ 17. Aggregate demand is the total quantity of goods and services used by businesses.

____ 18. The phase of the business cycle in which GDP begins to decline is known as a recession.

____ 19. Fiat money is money that has value as a good.

____ 20. The value of the next best alternative that has to be given up for the action that is chosen is the

____ 21. A company's office buildings are an example of

____ 22. Businesses can make decisions about the best use of their resources by analyzing

____ 23. Adam Smith's "invisible hand" refers to the role of

____ 24. It is easier to start your own business in a

____ 25. In a capitalist system, most property is

____ 26. A laissez-faire system is one in which

____ 27. Every purchase decision involves the use of two scarce resources,

____ 28. "Bait and switch" is an example of

____ 29. The money people have left over after they have paid their taxes is called

____ 30. A finance charge is the

____ 31. Which of the following is an example of a durable good?

____ 32. A usury law

____ 33. A person who buys a stock for $20 and sells it for $30 has earned $10 in

____ 34. Interest earned on a Roth IRA is

____ 35. The Dow-Jones Industrial Average is

____ 36. The Federal Deposit Insurance Corporation (FDIC) insures

____ 37. According to the law of demand, when the price of an item goes up, the quantity demanded

____ 38. According to the law of supply, higher prices prompt producers to

____ 39. When the price of a good is too high for consumers, they look for

____ 40. The quantity demanded of a product is affected by

____ 41. Diminishing marginal utility refers to the fact that

____ 42. The principle that states that the more you have of something, the less satisfaction you will get from an additional unit is the

____ 43. If the price of an item rises, quantity demanded usually

____ 44. If the price of a product is above its equilibrium price, the result is a

____ 45. The producer price index measures

____ 46. The part of the business cycle in which the economy starts to slow down is called

____ 47. New orders for consumer goods and changes in the number of building permits issued for private homes are examples of

____ 48. Using statistics to help make business decisions enables executives to

____ 49. The Federal Reserve System was established to

____ 50. The Federal Reserve has the power to

____ 51. Representative money is money that is

____ 52. Which of the following is not a function of money?

____ 53. Near moneys include

____ 54. the amount of output that results from a given level of inputs

____ 55. a situation in which people do not have enough resources to satisfy every desire

____ 56. land, labor, capital, and entrepreneurship

____ 57. the study of how individuals, families, businesses, and societies use limited resources to fulfill their unlimited wants

____ 58. activities done for a fee

____ 59. a simplified representation of the real world

____ 60. manufactured goods used to make other goods and services

____ 61. the work people do

____ 62. the ability of individuals to start new businesses, introduce new products and processes, and improve management techniques

____ 63. tangible items that people buy

____ 64. period of time after which time deposits will pay a stated rate of interest

____ 65. time deposit that states the amount of the deposit, the maturity, and the rate of interest being paid

____ 66. investment company that pools the money of many individuals to make short-term loans to businesses and banks

____ 67. certificates issued by the U.S. Treasury with maturities of three months to one year

____ 68. setting aside income for a period of time so that it can be used later

____ 69. savings plan that requires savers to leave their money on deposit for a certain period of time

____ 70. private retirement plan that allows individuals or married couples to defer taxation on the interest they earn on their retirement savings

____ 71. increase in value of an asset between the time it is purchased and the time it is sold

____ 72. payment people receive when they lend money

____ 73. bond issued by the federal government

____ 74. certificates issued by the U.S. treasury in exchange for a minimum of $1,000

____ 75. a person who acts as a go-between for buyers and sellers of stocks and bonds

____ 76. company plan that provides for retirement income

____ 77. bonds sold by local and state governments on which interest is not taxed by the federal government

____ 78. retirement plan that allows self-employed people to save up to 15 percent of their income in a tax-deductible account

____ 79. spreading of investments in several different types of accounts to lower overall risk

____ 80. electronic purchase and sale of stocks and bonds, often of smaller companies, which takes places outside the organized stock exchanges

____ 81. the amount of a good or service that producers are able and willing to sell at various prices during a specified time period

____ 82. an additional amount of satisfaction

____ 83. economic concept dealing with consumers' responsiveness to an increase or decrease in price

____ 84. economic rule stating that as more units of a factor of production are added, total output continues to increase, but at a diminishing rate

____ 85. economic rule stating that if two items satisfy the same need and the price of one rises, people will buy the other

____ 86. economic rule stating that the quantity demanded and price move in opposite directions

____ 87. economic rule stating that the additional satisfaction a consumer gets from purchasing one more unit of a product declines with each additional unit purchased

____ 88. economic rule stating that price and quantity supplied move in the same direction

____ 89. economic rule stating that individuals cannot keep buying the same quantity of a product if its price rises while their incomes stay the same

____ 90. the amount of a good or service that consumers are able and willing to buy at various possible prices during a specific time period

____ 91. irregular changes in the level of total output measured by real GDP

____ 92. measure of the change in price over time of a specific group of goods and services purchased by households

____ 93. total income earned by everyone in the economy

____ 94. prolonged rise in the general price level of goods and services

____ 95. welfare and other supplementary payments, such as unemployment compensation, Social Security, and Medicaid that a state or the federal government makes to individuals

____ 96. major slowdown of economic activity during which millions of people are unemployed, many businesses fail, and the economy operates far below capacity

____ 97. total dollar value of all final goods and services produced in a nation in a single year

____ 98. prolonged decline in the general price levels of goods and services

____ 99. income remaining for people to spend or save after all taxes have been paid

____ 100. total income that individuals receive before personal taxes are paid

____ 101. anything customarily used as a medium of exchange, a unit of accounting, or a store of value

____ 102. money deposited in a bank that can be withdrawn at any time by presenting a check

____ 103. money that has value because a government fiat, or order, has established it as acceptable for payment of debts

104. Understanding Cause and Effect Explain why productivity rises when capital is increased.