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Policymakers
________ have the ability to influence the demand for goods and services by altering how much the government spends, how much it taxes, and how much it prints.
Central planning
________ meant that the government could organize an economic activity that was beneficial for the country.
Externality
________: the impact of one person's actions on the well- being of a bystander.
Rational people
________ respond to incentives because they make it easier to make a decision.
Productivity
________: the number of goods and services produced from each unit of labor input.
Incentive
________: something that induces a person to act.
Adam Smith
________ observed that households and firms are guided by an "invisible hand "while interacting in markets, leading to a desirable market outcome.
Incentives
________ are the key to knowing how markets work.
President Gerald Ford
________ called inflation "public enemy number one "during the 1970s.
Marginal change
________ is used by economists to describe a small adjustment to an action plan.
U.S.
The ________ and China compete for the same customers when it comes to market goods.
fuel efficient
Taxes on gas lead people to drive more small and ________ vehicles.
Business cycle
________: fluctuations in economic activity, such as employment and production.
Scarcity
________: the limited nature of society's resources.
variety of options
People make better decisions when they have a(n) ________ to analyze.
Sam Peltzman
________ argued that seat belt laws led to fewer deaths per accident but more accidents.
Rational decisions
________ are made when an action's marginal benefits are larger than its marginal cost.
Property rights
________: the ability of an individual to own and exercise control over scarce resources.
Inflation
________: an increase in the overall level of prices in the economy.
Government Prints
Principle 9: Prices Rise When the ________ Too Much Money.
Opportunity cost
________: whatever must be given up to obtain some item.
Efficiency
________: the property of society getting the most it can from its scarce resources.
Higher market prices
________ result in less consumerism but an incentive for more production.
Wealth of Nations
An Inquiry into the Nature and Causes of the ________ was written by Adam Smith, an economist, in 1776.
Decision makers
________ should go over each possible action before making a decision.
Market failure
________: a situation in which a market left on its own fails to allocate resources efficiently.
Equality
________: the property of distributing economic prosperity uniformly among the members of society.
Note 
Flashcard (50)