Economics Test Reviews

Unit 1

Characteristics of the U. S. free enterprise system

How does competition influence markets in the free enterprise system?

Communist economic systemBe able to create a circular flow modelOpportunity costBusiness responsibilitiesBe able to compare and contrast free

enterprise, socialist, and communist economic systems

Unit 1

Advantages and disadvantages of corporations

Sole proprietorshipsHow does a corporation raise capital?How can government affect the circular flow

model?Basic economic problemFriedrich HayekProduction possibilities curve

Unit 3

Comparative advantageAbsolute advantageSpecializationTradeTariffEuropean UnionNorth American Free Trade AgreementHow does international trade shift the PPC?Opportunity cost

Unit 4

Pure competitionMonopolistic competitionOligopolyMonopolyDemandTIMERSTIGGERSSupplyPrice, quantity, equilibrium price, equilibrium quantityBe able to draw and interpret supply and demand

curvesWhy supply and demand curves shiftMarketNon-price determinant of supply and demand

Unit 5

LiquidityRisks of investmentHow to figure net worthIRA401KMutual fundFive Cs of CreditBenefits and costs of home ownershipHow to payoff credit card debt?Costs and benefits of bankruptcyHow to improve your credit score?Open-end creditClosed-end credit

Unit 6

Income tax, excise tax, tariffsState, local, and federal taxesHow does the government regulate our economy? How does international trade effect our economy?Revenues, expendituresCharacteristics of economic expansionWho has the authority to tax?, 16th AmendmentOSHAExpansionary and contractionary monetary policy How do new technologies affect economic growth?Economic indicators- unemployment rate, housing starts,

Consumer Price Index (a measure for inflation), PPI, bankruptcies, Gross Domestic Product, stock market prices

Unit 7

Commodity moneyFiat money Representative moneyWho owns the Federal Reserve?What are reasons for the decline of the U. S. dollar’s

value?Pros and cons of barter, currency, credit, and debit

cardsPhases of the business cycleTight money policy and easy money policyFunctions of moneyMonetary policyThe Fed’s toolsFederal Reserve SystemWhat happens when the reserve requirement is raised?