Module 5: Economics

Why is a profit motive important in many economies?

• People would not use coupons without it.

• Businesses could not advertise without it.

• Businesses could not set prices without it.

• People would not start businesses without it.

Match the economic term with its description.

• labor

• items such as tools, machines, factories, and office equipment needed for a business to function

• natural resources

• raw materials needed to produce goods

• capital

• money that a business uses to buy the items needed for the business to function

• financial capital

• human time, effort, skills, and talent needed to produce goods

Which of the following scenarios accurately illustrates the concept of economic interdependence?

• An entrepreneur decides to open a bakery and produces bread for the neighborhood.

• Good rainfall allows a farmer to produce more strawberries and he chooses to expand his business.

• Japan lacks iron to make steel, so Japan enters into a trading relationship with Australia and Brazil, who supply Japan with iron ore.

• South Africa is rich in diamonds, gold, and mineral resources, so South Africa creates a mining industry that produces much wealth.

Match the name of the country with its type of economy

• Taiwan

• Capitalist

• China

• Communist

• Sweden

• Socialist

Why must governments ensure that corporate taxes are not too high?

• Public services will suffer.

• Businesses will not make a profit.

• The government cannot invest in education.

• The government cannot invest in national defense.

Match the type of industry with its description

• secondary industry

• Cheese makers use milk from dairy cows to produce cheese.

• primary industry

• A grocer sells cheese in a market.

• tertiary industry

• Inspectors examine the quality of cheese.

• quaternary industry

• A farmer sells milk produced from dairy cows.

Which investment option would fall on the upper right portion of the graph?

• stocks

• savings accounts

• certificates of deposit

How can customers feel certain that their money stored in U.S. banks is safe?

• Money deposits are insured.

• Many banks have armed guards.

• Most banks have good security systems.

• It is very difficult to steal money from banks.

Why might a person who plans to buy a car in nine months choose to invest in a certificate of deposit (CD)?

• CDs offer a better rate of return than stocks.

• CDs offer a better interest rate than savings accounts.

• Customers can cash their CD at any time when they find a good car deal.

• Customers can withdraw their money from a CD at any time without a penalty.

Which of the following has helped increase globalization? Select 3 answers.

• warfare

• airplanes

• the Internet

• trade embargoes

• telecommunications