Economics Flashcard

Front

In the Circular Flow Model, households provide what to businesses?

Back

Factors of production

Front

National income is the total amount of money earned by:

Back

Individuals and businesses within a country

Front

Disposable income

Back

Income available for spending and saving after taxes

Front

Inflation occurs when:

Back

There is a sustained rise in the general price level of goods and services

Front

Which of the following would be an example of disinflation?

• The inflation rate decreasing from 5% to 2%
• Prices dropping significantly across the economy
• Wages increasing faster than the cost of living
• A rapid increase in the money supply

Back

The inflation rate decreasing from 5% to 2%

Front

Deflation is most harmful to:

Back

People with fixed incomes

Front

What does the Consumer Price Index (CPI) measure?

Back

The average change over time in the prices paid by consumers for a market basket of goods and services

Front

The Federal Reserve System is responsible for:

Back

Controlling the money supply, setting the federal funds rate, and regulating banks

Front

If the Federal Reserve raises interest rates, what is the likely impact on borrowing and spending?

Back

Borrowing decreases and spending slows

Front

Human capital

Back

The skills, knowledge, and experience possessed by workers