Economics Final Review

AOF Lessons 2, 3
Chapter 1: What is Economics?
1. Define economics.
2. Define scarcity.
3. Define the 4 factors of production.
4. Define entrepreneur.
5. Define opportunity cost.
6. Define guns or butter.
7. Define efficiency.
8. Define incentives. How do they motivate people?
9. What is the main incentive for a business?
10. What does a Production Possibilities Graph show?
11. How can an economy increase its production possibilities?
12. How does a Production Possibilities Graph show opportunity cost?
AOF Lessons 4, 5, 11
Chapter 2: Economic Systems
13. What are the 3 key economic questions?
14. Define the 4 economic systems.
15. Explain how competition, self-regulation and self-interest work in the free market.
16. Define free enterprise.
17. Describe what happens in the Circular Flow Model.
AOF Lesson 11, 12
Chapter 3: American Free Enterprise
18. Define market failure.
19. Define public goods. Give 3 examples of public goods.
20. Give an example of a positive externality and a negative externality.
21. How do consumers tell the government and businesses what they want?
AOF Lesson 6
Chapter 4: Demand
22. Define Law of Demand.
23. Define normal goods and inferior goods.
24. Define complements and give one example.
25. Define substitutes and give one example.

26. Define elastic demand and give one example.

27. Define inelastic demand and give one example.
28.

What are the 6 factors that can cause the demand curve to shift to the right?

29.

What are the 6 factors that can cause the demand curve to shift to the left?

30.

How has the Baby Boom generation affected demand?

AOF Lesson 4, 6
Chapter 5: Supply
31. Define Law of Supply.
32. What is the main factor that can affect elasticity of supply?
33. Define subsidy.
34.

What are the factors that can cause the supply curve to shift to the left?

35.

What are the factors that can cause the supply curve to shift to the right?

AOF Lesson 6, 9
Chapter 6: Prices
36. Define equilibrium.
37. Define disequilibrium.
38. Define excess supply (surplus). How does it affect price?
39. Define excess demand (shortage). How does it affect price?
40. Define price floor. How does it affect supply and demand?
41. Define price ceiling. Give one example.
AOF Lesson 10
Chapter 7: Market Structures
42.

Define the 4 market structures.

43.

What is collusion?

44.

Define natural monopoly. Give 2 examples.

AOF Lesson 2, 12, 13

Chapter 10: Money and Banking
45. What are the 3 uses of money?
46. Define liquidity.
47. Define money supply.
AOF Lesson 2
Chapter 12: Gross Domestic Product and Growth
48. Define Gross Domestic Product. What is included in GDP? What is not included?

49. What is the advantage of using real GDP instead of nominal GDP?
50. How do Americans maintain a high standard of living?
51. Define business cycle.
52. Define expansion.
53. Define contraction.
54. Define recession.
55. Define depression.
56. What is the best measure of a nations standard of living?
57. How do interest rates affect consumer spending?
58. Define aggregate demand. How can the government increase aggregate demand?
AOF Lesson 2
Chapter 13: Economic Challenges
59. Define the four types of unemployment.
60. Define underemployment.
61. Define unemployment rate.
62. Define inflation.
63. What is the Consumer Price Index?
64. What is creeping inflation?
65. What is the Cost-Push Theory of Inflation?
66. Describe how gender discrimination affects pay in the U.S.
67. What is the glass ceiling? (chapter 9)
AOF Lesson 2, 12
Chapter 14: Taxes
68. Define progressive tax.
69. Define regressive tax.
70. Define mandatory spending.
71. What category makes up the largest percentage of mandatory spending?
72. Define discretionary spending.
AOF Lesson 2, 13
Chapter 15: Fiscal Policy
73. Define Fiscal Policy.
74. What are 3 goals of the government when creating public policy?
75. Give 2 examples of expansionary fiscal policies.
76. Give 2 examples of contractionary fiscal policies.
77. Define Classical Economics.

78. Define Keynesian Economics

79. Define the multiplier effect.
80. Define the Supply-Side Economics.
81. What is a budget deficit? What is a budget surplus?
82. Define the national debt.
AOF Lesson 2, 12, 13
Chapter 16: Monetary Policy
83. Define Monetary Policy.
84. What is the most important job of the Federal Reserve?
85. Who is the current chairperson of the Federal Reserve?
86. How does lowering interest affect the demand for money?
87. How do banks create money?
88. What is the Feds most important monetary policy tool?
89. What policies would the Fed use to fight inflation?
90. Define Interest.
91. How does someone avoid losing value on his or her savings?
92. What would be the effect of increasing the money supply?
AOF Lesson 13, 14
Chapter 17: Global Economics
93. Define specialization. Why does specialization cause nations to trade with each other?
94. Who benefits from international trade?
95. Define comparative advantage.
96. Define tariff.
97. Define protectionism. What is the argument in favor of protectionism?
98. Define trade surplus.
99. Define trade deficit.
100. What was the purpose of NAFTA?
101. How does the value of the US dollar compared to other currencies affect travel and spending in other countries?