Economic Concepts #2

In reaction to the economy not recovering from a economic recession which of the following economists argued the theory that the government must take on the role of economic stimulator?

• Adam Smith

• John Maynard Keynes

• Frederich Hayek

• Milton Friedman

The idea that government should not interfere with a country's economic system

• Socialism

• Laissez-faire Capitalism

• Communism

• Central Planning

Adam Smith argued that the role of the government within the economy should be limited to which of the following components?

• Private Property

• Regulations

• Production

• Allocation of Resources

A negative externality of you buying a cell phone could be

• Pollution

• Competition

• Child Labor

• Bankruptcy

The image shows an example of

• Keynesian Theory

• Incentives

• Opportunity Cost

• Free Market

In terms of resources, what do households provide for businesses?

• loans

• savings

• labor

• private goods

Someone buys a car in exchange for a large amount of money. They have completed an exchange in which part of the circuclar flow model?

• Product Market

• Factor Market

• Firms

• Individuals

Government investment in infrastructure leads to businesses being started to meet the needs/wants of people in the suburbs, which leads to more jobs, which leads to an increase in income tax/sales tax revenue. This is an example of

• Laissez Faire

• Free Market

• Opportunity Cost

• Multiplier Effect

The image shows an example of the free market meeting the needs and wants of the consumer.

• True

• False

If a news headline says, "3 months of consecutive job losses is impacting consumer confidence."

Where on the business cycle is the current economy?

• Peak

• Contraction/Recession

• Trough

• Expansion/Growth/Recovery