________ 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.
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Central planning
________ meant that the government could organize an economic activity that was beneficial for the country.
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Externality
________: the impact of one person's actions on the well- being of a bystander.
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Rational people
________ respond to incentives because they make it easier to make a decision.
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Productivity
________: the number of goods and services produced from each unit of labor input.
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Incentive
________: something that induces a person to act.
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Adam Smith
________ observed that households and firms are guided by an "invisible hand "while interacting in markets, leading to a desirable market outcome.
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Incentives
________ are the key to knowing how markets work.
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President Gerald Ford
________ called inflation "public enemy number one "during the 1970s.
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Marginal change
________ is used by economists to describe a small adjustment to an action plan.
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U.S.
The ________ and China compete for the same customers when it comes to market goods.
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fuel efficient
Taxes on gas lead people to drive more small and ________ vehicles.
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Business cycle
________: fluctuations in economic activity, such as employment and production.
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Scarcity
________: the limited nature of society's resources.
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variety of options
People make better decisions when they have a(n) ________ to analyze.
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Sam Peltzman
________ argued that seat belt laws led to fewer deaths per accident but more accidents.
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Rational decisions
________ are made when an action's marginal benefits are larger than its marginal cost.
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Property rights
________: the ability of an individual to own and exercise control over scarce resources.
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Inflation
________: an increase in the overall level of prices in the economy.
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Government Prints
Principle 9: Prices Rise When the ________ Too Much Money.
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Opportunity cost
________: whatever must be given up to obtain some item.
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Efficiency
________: the property of society getting the most it can from its scarce resources.
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Higher market prices
________ result in less consumerism but an incentive for more production.
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Wealth of Nations
An Inquiry into the Nature and Causes of the ________ was written by Adam Smith, an economist, in 1776.
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Decision makers
________ should go over each possible action before making a decision.
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Market failure
________: a situation in which a market left on its own fails to allocate resources efficiently.
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Equality
________: the property of distributing economic prosperity uniformly among the members of society.
Studied by 5 people
