SS8B Exam Review

Front

How does the Federal Reserve manage inflation?

Back

The Federal Reserve manages inflation primarily through monetary policy by adjusting interest rates.

Front

Why is there interdependence among nations?

Back

Interdependence among nations exists because each nation has limited and unique resources

Front

What is the relationship between education and earning potential?

Back

Education is positively correlated with earning potential.

Front

What is gross domestic product?

Back

Total monetary value of all finished goods and services produced within a country's borders in a specific time period.

Front

What is the purpose of international trade?

Back

The purpose of international trade is to increase efficiency, economic growth, and standards of living by allowing countries to specialize in producing goods and services where they have a comparative advantage.

Front

What are the characteristics of a command economy?

Back

Central planning, government control over resources, production, and distribution.

Front

What is a mixed market economy?

Back

A mixed market economy combines elements of the free market with some government intervention.

Front

What is a free market economy characterized by?

Back

Minimal government intervention and prices determined by supply and demand

Front

A free market economy is primarily motivated by

Back

Profit

Front

What are the effects of competition in a mixed market economy?

Back

The effects of competition in a mixed market economy include lower prices, increased innovation, improved quality of goods and services, and greater efficiency.