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openstax principles of economics 3e – key terms (actual exam)questions,answers 2024 – 2025
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openstax principles of economics 3e – key terms (actual exam)questions,answers 2024 – 2025
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openstax principles of economics 3e – keyterms (actual exam)questions,answers
2024 – 2025
labor force participation rate - ANSWERS-this is the percentage of adults in an
economy who are either employed or who are unemployed and looking for a job
natural rate of unemployment - ANSWERS-the unemployment rate that would
exist in a growing and healthy economy from the combination of economic,
social, and political factors that exist at a given time
out of the labor force - ANSWERS-those who are not working and not looking for
work—whether they want employment or not; also termed "not in the labor
force"
relative wage coordination argument - ANSWERS-across-the-board wage cuts are
hard for an economy to implement, and workers fight against them
,structural unemployment - ANSWERS-unemployment that occurs because
individuals lack skills valued by employers
underemployed - ANSWERS-individuals who are employed in a job that is below
their skills
unemployment rate - ANSWERS-the percentage of adults who are in the labor
force and thus seeking jobs, but who do not have jobs
adjustable-rate mortgage (ARM) - ANSWERS-a loan a borrower uses to purchase a
home in which the interest rate varies with market interest rates
economics - ANSWERS-the study of how humans make choices under conditions
of scarcity
economies of scale - ANSWERS-when the average cost of producing each
individual unit declines as total output increases
exports - ANSWERS-products (goods and services) made domestically and sold
abroad
,fiscal policy - ANSWERS-economic policies that involve government spending and
taxes
circular flow diagram - ANSWERS-a diagram that views the economy as consisting
of households and firms interacting in a goods and services market and a labor
market
command economy - ANSWERS-an economy where economic decisions are
passed down from government authority and where the government owns the
resources
division of labor - ANSWERS-the way in which different workers divide required
tasks to produce a good or service
globalization - ANSWERS-the trend in which buying and selling in markets have
increasingly crossed national borders
goods and services market - ANSWERS-a market in which firms are sellers of what
they produce and households are buyers
gross domestic product (GDP) - ANSWERS-measure of the size of total production
in an economy
, imports - ANSWERS-products (goods and services) made abroad and then sold
domestically
labor market - ANSWERS-the market in which households sell their labor as
workers to business firms or other employers
macroeconomics - ANSWERS-the branch of economics that focuses on broad
issues such as growth, unemployment, inflation, and trade balance
market - ANSWERS-interaction between potential buyers and sellers; a
combination of demand and supply
market economy - ANSWERS-an economy where economic decisions are
decentralized, private individuals own resources, and businesses supply goods
and services based on demand
microeconomics - ANSWERS-the branch of economics that focuses on actions of
particular agents within the economy, like households, workers, and business
firms
model/theory - ANSWERS-a representation of an object or situation that is
simplified while including enough of the key features to help us understand the
object or situation
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