Chapter 3 Key Term Review

What is a centrally planned economy?

• An economy where the government takes charge of all economic decisions

• An economy driven by consumer choices

• An economy based on free market principles

• An economy with no government intervention

What is deflation?

• The decrease in prices and increase in the value of money

• The increase in prices and decrease in the value of money

• A period of economic stagnation

• A strategy to boost consumer spending

What does demand refer to in economics?

• The amount of goods that consumers want

• The amount of goods that producers supply

• The cost of goods in the market

• The level of government intervention in the market

What is the division of labor?

• A production process in which a worker or group of workers is assigned a specialized task to increase productivity

• A method of reducing the workforce

• A strategy to increase consumer demand

• A way to decrease production costs

What is an economic development incentive?

• Government-provided benefit to specific businesses that will fulfill a government agenda

• A tax imposed on all businesses

• A penalty for businesses that do not meet government standards

• A subsidy for all consumers

What is "economic utility"?

• Value and usefulness created by business activities

• The total number of goods produced

• The amount of taxes collected

• The number of employees in a company

What does "equilibrium" mean in economic terms?

• A point at which the amount of products produced is equal to the demand for the products

• The highest point of economic growth

• The lowest point of economic decline

• The balance between imports and exports

What is an "export"?

• A good that is shipped out of a country

• A service provided within a country

• A product that is imported into a country

• A tax levied on foreign goods

What does the term "gross domestic product" refer to?

• The total population of a country

• The total monetary value of goods and services produced in a country during one year

• The total exports of a country

• The total imports of a country

What is the term for a percentage of a loan that is charged to the borrower incrementally?

• Principal

• Interest rate

• Loan term

• Amortization