Economics Semester Test Study Guide

Name: ______Period: ______

Chapter 1: What is Economics?

  1. What does marginal mean?
  2. opportunity cost:
  3. scarcity:
  4. want:
  5. need:
  6. supply curve:
  7. demand curve:

Chapter 2: Economic Systems and the Global Economy

  1. Who is considered the father of communism?
  2. Who wrote Wealth of Nations?
  3. free market economy:
  4. command economy:
  5. traditional economy”
  6. globalization:
  7. economic system:

Chapter 3

  1. Describe the role of the government in a free enterprise economy and a command economy.
  2. incentive


Chapter 4

  1. supply:
  2. demand:
  3. market price:
  4. law of demand:
  5. law of diminishing marginal utility:
  6. substitutes:
  7. complements:

Chapter 5

  1. In what direction do supply curves and demand curves slope?
  2. supply:
  3. law of supply:

Chapter 6

  1. market clearing price:
  2. What impact does a surplus of a good have on the price of that good? How about a shortage?

Chapter 7

  1. sole proprietorship:
  2. partnership:
  3. corporation:
  4. stocks:
  5. bonds:
  6. franchise:

Chapter 8

  1. perfect competition:
  2. monopolistic competition:
  3. oligopolistic competition:
  4. monopolistic competitive competition:
  5. antitrust laws:

Chapter 9

  1. minimum wage:
  2. price floor:
  3. price ceiling:

Chapter 10

  1. How can banks create new money?
  2. List and explain the three functions of money?
  3. Explain the role of the Federal Reserve Bank in the U.S. economy?
  4. total reserves:
  5. required reserves:
  6. excess reserves:
  7. M1:

Chapter 11

  1. GDP:
  2. GNP:
  3. per capita GDP:
  4. real GDP:
  5. CPI:
  6. aggregate supply:
  7. aggregate demand:

Chapter 12

  1. inflation:
  2. deflation:
  3. List and explain the parts of the business cycle.

Chapter 13

  1. Explain the difference between fiscal policy and monetary policy?
  2. expansionary fiscal policy:
  3. contractionary fiscal policy:
  4. expansionary monetary policy:
  5. Contractionary monetary policy:

Chapter 14

  1. Social Security tax:
  2. Medicare:
  3. federal income tax:
  4. corporate income tax:
  5. sales tax:
  6. excise tax:
  7. proportional tax:
  8. progressive tax:
  9. regressive tax:

Chapter 15: International Trade and Economic Development

  1. Explain the difference between an export and an import.
  2. balance of trade:
  3. trade surplus:
  4. trade deficit:
  5. comparative advantage:
  6. absolute advantage:
  7. common market:
  8. quota:
  9. tariff:
  10. exchange rate:
  11. List benefits of specialization of labor.
  12. offshoring:
  13. outsourcing:

Chapter 16: Stocks and Bonds

  1. What is the largest stock exchange in the world?
  2. How many corporations are represented within the Dow Jones Industrial Average? What type of corporations make up the Dow?
  1. Explain the difference between a stock and a bond.
  2. par value:
  3. futures contract:
  4. ticker symbol

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