ECO-FE Economics Credit by Examination Review Flashcards

A collection of 100 vocabulary flashcards matching Texas Essential Knowledge and Skills (TEKS) requirements and key concepts for the ECO-FE Economics exam.

ECO-FE Exam Format

A Credit by Examination consisting of 60 multiple choice questions and four essay questions based on the TEKS.

Recommended Exam Time Limit

Three hours under supervision for the Credit by Examination.

Gary E. Clayton

Author of the textbook Economics (2016) used with the ECO-FE course.

Economics (2016)

The state-adopted textbook authored by Gary E. Clayton and published by McGraw-Hill Education.

McGraw-Hill Education

The publisher of the 2016 textbook Economics by Gary E. Clayton.

ISBN 978-0-02-145664-2

The International Standard Book Number for Gary E. Clayton's Economics (2016) textbook.

ECO-FE CBE Version 3.3

The specific version identifier (v.3.3) of the Economics Credit by Examination review document.

ECO-FE Online Review #3528, 3530

The online course review identifiers associated with the ECO-FE Credit by Examination.

ECO-FE Print Review #10096

The print course review identifier associated with the ECO-FE Credit by Examination.

TEKS 8.4

The Texas Essential Knowledge and Skills rule titled 'Economics with Emphasis on the Free Enterprise System and Its Benefits, High School (One-Half Credit)'.

Grade 12

The recommended high school grade level in which the Economics course is to be taught.

Social Studies Department

The academic department required to teach the Economics with Emphasis on the Free Enterprise System course.

One-Half Credit

The amount of high school course credit awarded for completing Economics with Emphasis on the Free Enterprise System.

Scarcity

The fundamental economic problem of limited resources relative to unlimited consumer wants, concerning production, consumption, and distribution.

Capitalism

A synonymous term used alongside free enterprise and free market system to describe the U.S. economic system.

Texas Education Code (28.002(h)

The state statute referenced regarding the importance of patriotism and basic democratic values of the state and nation.

Constitutional Republic

A representative form of government whose representatives derive authority from the consent of the governed, serve for an established tenure, and are sworn to uphold the constitution.

House Bill 492

An act of the Texas Legislature signed into law in 2005 requiring personal financial literacy concepts to be mastered by high school students.

Year 2005

The year House Bill 492 was signed into law by the Texas Legislature.

Personal Financial Literacy

Instruction in concepts like credit card debt, home ownership, and savings to enable students to become self-supporting adults.

Celebrate Freedom Week

A mandated period of instruction under TEC (29.907 concerning the intent, meaning, and importance of the Declaration of Independence and U.S. Constitution.

Celebrate Freedom Recitation Text

The passage beginning 'We hold these Truths to be self-evident…' required to be studied and recited by students during Celebrate Freedom Week.

Grades 3-12 Recitation Mandate

The requirement that students in Grades 3 through 12 study and recite the foundational Declaration text during Celebrate Freedom Week.

Declaration of Independence Historical Contexts

Topics linked to the Declaration of Independence including American Revolution, U.S. Constitution, abolitionist movement, Emancipation Proclamation, and women's suffrage.

Economic Rights and Responsibilities

The rights and duties analyzed for both consumers and businesses operating in the U.S. free enterprise system.

Factors of Production

The economic inputs (land, labor, capital, and entrepreneurship) required to produce goods and services.

Production-Possibilities Curve

An economic graph used to illustrate resource allocation choices, trade-offs, opportunity costs, and scarcity.

Opportunity Cost

The value of the next best alternative given up when making an economic choice.

Price Effect on Supply and Demand

The principle that changes in price cause changes in the quantity demanded and quantity supplied.

Non-Price Determinants

Factors other than price that create changes in supply and demand curves, shifting the equilibrium price.

Supply-and-Demand Graph

A visual model interpreted alongside supply-and-demand schedules to show equilibrium price and quantity.

Absolute Advantage

The ability of an entity to produce more of a good or service using the same or fewer resources than another.

Comparative Advantage

The economic principle explaining why and how countries trade based on producing goods at a lower opportunity cost.

Trade Barriers

Government policies like tariffs or quotas that restrict international trade and impact economic activities.

Free Trade

International trade operating without protective tariffs, quotas, or other trade barriers.

Exchange Rates

The relative prices of different currencies whose fluctuations impact imports and exports.

Characteristics of Economic Systems

Core structural components including property rights, incentives, economic freedom, competition, and the role of government.

Friedrich Hayek

An influential economic philosopher who advocated for free markets and criticized central economic planning.

Milton Friedman

An economic philosopher known for promoting free-market capitalism, monetarism, and minimal government intervention.

John Maynard Keynes

An economic philosopher who emphasized government intervention and demand management in macroeconomic crises.

Adam Smith

An economic philosopher recognized for introducing concepts of free market competition and the 'invisible hand'.

Characteristics of U.S. Free Enterprise

Private property, incentives, economic freedom, competition, and the limited role of government.

Benefits of U.S. Free Enterprise

Individual freedom for consumers and producers, variety of goods, responsive prices, investment opportunities, and wealth creation.

U.S. Economic Goals

Economic growth, stability, full employment, freedom, security, equity, and efficiency.

Property Rights

The legal rights of individuals and businesses to own, use, and dispose of private property in the United States.

Government Restrictions on Property

Legal regulations and ordinances placed by government on the use of business and individual property.

Circular-Flow Model

An economic model demonstrating the flow of money, resources, and goods/services between resource owners, firms, government, and the world.

Resource Owners

Households or individuals in the circular-flow model who supply economic resources to businesses.

Firms

Business entities in the circular-flow model that purchase resources to produce goods and services for consumers.

Pure Competition

A market structure with a large number of independent sellers offering identical products with no control over market price.

Monopolistic Competition

A market structure where many sellers offer similar but differentiated products with slight price control.

Oligopoly

A market structure dominated by a small number of large sellers whose decisions directly affect each other.

Monopoly

A market structure characterized by a single producer controlling the supply of a unique product with no close substitutes.

Unemployment Rate

A key economic indicator measuring the percentage of the labor force actively seeking employment but unable to find work.

Gross Domestic Product

The total monetary value of all final goods and services produced within a country's borders during a specific period.

Gross Domestic Product Per Capita

A metric calculated by dividing a nation's GDP by its population, used as a measure of national wealth.

Rate of Inflation

The percentage rate at which the general level of prices for goods and services rises over time.

Business Cycles

Fluctuations in national economic activity analyzed using key economic indicators.

Productivity

The efficiency with which resources are converted into outputs, directly relating to long-term economic growth.

Technology and Growth

The application of scientific knowledge to improve production efficiency, driving overall economic growth.

Functions of Money

The three primary uses of money: medium of exchange, unit of account, and store of value.

Commodity Money

Money that has intrinsic value because it is made of a commodity such as gold or silver.

Fiat Money

Currency that has value solely because government decree declares it to be legal tender.

Representative Money

Paper money backed by a physical commodity like gold or silver that can be exchanged upon demand.

Barter

A system of exchange where goods or services are directly traded for other goods or services without using money.

Federal Reserve System

The central bank of the United States responsible for conducting national monetary policy.

Reserve Requirements

A monetary policy tool defining the minimum proportion of total customer deposits banks must hold in reserve.

Discount Rate

The interest rate charged by the Federal Reserve to commercial banks borrowing funds.

Federal Funds Rate Target

The target interest rate set by the Federal Reserve for interbank overnight lending.

Open-Market Operations

The buying and selling of U.S. government securities in the open market by the Federal Reserve to adjust money supply.

Abandonment of the Gold Standard

The policy shift ending the direct convertibility of U.S. dollars into gold, contributing to dollar value changes.

U.S. Constitution Economic Principles

Foundational provisions in the U.S. Constitution addressing key concepts such as property rights and taxation power.

Fiscal Policy

The use of government spending and taxation at local, state, and national levels to influence economic activity.

Federal Budget Expenditures

The official spending allocations made by the federal government funded by tax revenues.

Sole Proprietorship

A business owned and run by a single individual who retains all profits and assumes unlimited personal liability.

Partnership

A business structure jointly owned by two or more people who share operational responsibilities, profits, and liabilities.

Corporation

A legal entity separate from its owners that limits investor liability and raises capital through stocks and bonds.

Stocks

Securities representing partial equity ownership in a corporation issued to raise corporate funds.

Bonds

Interest-bearing certificates issued by corporations or governments to borrow money from investors.

Capital Formation

The creation of productive physical capital assets funded through savings in an economy.

Financial Institutions

Organizations such as banks that facilitate saving, investing, and borrowing for households and businesses.

Interest

The price paid for borrowing money or return earned on savings, essential for allocating savings productively according to risk.

Checkbook Balancing

The process of reconciling personal checking account register entries against official monthly bank statements.

Credit Score

A numeric evaluation of an individual's creditworthiness used by lenders to assess borrowing risk.

Low-Risk Borrower

A borrower with a high credit score and responsible debt management history who qualifies for lower interest rates.

Personal Bankruptcy

A legal proceeding in which an individual's debts are restructured or discharged, with significant financial costs and benefits.

Buying Insurance

A personal financial strategy evaluated by comparing monthly premium costs against financial protection against risk.

Charitable Giving

The voluntary donation of funds or resources to nonprofit organizations, evaluated for personal financial costs and benefits.

Renting a Home

A housing choice providing flexibility and lower upfront costs, but providing no home equity buildup.

Buying a Home

A housing choice involving long-term financial commitment and maintenance costs, balanced by equity creation.

FAFSA

The Free Application for Federal Student Aid submitted by students to determine eligibility for federal postsecondary financial assistance.

United States Department of Education

The federal executive department providing the Free Application for Federal Student Aid (FAFSA).

Student Grants

Financial aid awards for postsecondary education based on need that do not require repayment.

Student Loans

Federal or private borrowed money used for higher education that must be repaid with interest.

Work-Study Programs

Programs offering federally funded part-time employment to help eligible students pay education expenses.

Personal Retirement Plan

Financial accounts and options utilized by individuals to save and invest funds for long-term retirement security.

August 23, 2010

The original effective date of TEKS 8.4 adoption published in 35 TexReg 7406.

March 7, 2012

The effective date of amendments to TEKS 8.4 published in 37 TexReg 1512.

35 TexReg 7406

The Texas Register volume and page citation documenting the adoption of 8.4 TEKS.

Problem-Solving Process

A structured method to identify a problem, gather info, consider options, implement a solution, and evaluate results.