Econ Exam

Economics is a social science that studies the production, distribution, and consumption of goods and services and analyzes the choices that individuals, businesses, governments, and nations make to allocate resources.

This is an economic system where the price of goods and services is determined by the supply and demand of the market without any government intervention.

This refers to a policy of minimum governmental interference in the economic affairs of individuals and society.

The Production Possibilities Curve (PPC) is a graphical representation of the maximum combinations of two goods that can be produced with a fixed amount of resources and technology.

The Production Possibility Frontier (PPF) is a graphical representation of the maximum combinations of two goods that an economy can produce with its limited resources and technology.

A black market is an economic activity that takes place outside government-sanctioned channels. Illegal market transactions usually occur “under the table” to let participants avoid government price controls or taxes.

GMO stands for genetically modified organisms. It refers to an organism whose genetic material has been altered using genetic engineering techniques.

A recession is a significant, widespread, and prolonged downturn in economic activity. It is characterized by a decline in production, employment, and income, which can lead to a decrease in consumer spending and a contraction of the economy

The stock market is a marketplace where buyers and sellers of securities, such as stocks and bonds, come together to trade.

Fairtrade is a movement that aims to help farmers and workers in developing countries by ensuring that they have access to export markets and are paid a fair price for their products.

Sustainability refers to the ability of an economy to maintain a balance between economic growth and environmental protection while also promoting social well-being.

Shareholder value refers to the value delivered to the equity owners of a corporation, thanks to management’s ability to increase sales, earnings, and free cash flow, which leads to an increase in dividends and capital gains for shareholders.

Foreign workers are people who work in a country other than the one in which they are citizens.

Outsourcing is a business practice where a company hires another party to perform services or create goods that were traditionally performed in-house by the company’s own employees and staff.

A professional association is an organization that seeks to further a particular profession, the interests of individuals and organizations engaged in that profession, and the public interest.

Inflation is a general increase in the prices of goods and services in an economy.

Seasonal unemployment is a type of unemployment that occurs when people who work in seasonal jobs become unemployed when demand for labor decreases due to the change in season.

Debt refers to the amount of money that one party owes to another.

Fixed cost refers to the cost of a business expense that doesn’t change even with an increase or decrease in the number of goods and services produced or sold

A price freeze is a temporary ban on price increases for a product or service.

The term invest refers to the act of allocating resources, usually capital (i.e., money), with the expectation of generating an income, profit, or gains.

A variable cost is an expense that changes in proportion to production output or sales.

A deficit is a situation where expenses exceed revenues, imports exceed exports, or liabilities exceed assets in a particular year.

An incentive is something that motivates or encourages a person to take a particular course of action.

An emergency fund is a sum of money that is set aside to cover unexpected expenses or financial emergencies.

A model is a simplified representation of a complex system or process that is used to understand, analyze, or predict behavior.

A credit history is a record of an individual’s or company’s past borrowing and repayment behavior.

Credit is a contractual agreement between a lender and a borrower in which the borrower receives a sum of money or something else of value and commits to repaying the lender at a later date, typically with interest.

A corporation is a legal entity that is separate and distinct from its owners.

A sole proprietorship is a type of business structure in which an individual owns and operates a business on their own.

A partnership is a formal arrangement between two or more parties to manage and operate a business and share its profits.

A trade-off is the decision-making process of choosing between two or more competing alternatives.

Fiscal policy refers to the use of government spending and taxation policies to influence economic conditions such as inflation, employment, and economic growth.

Negotiating a contract refers to the process of discussing and agreeing on the terms of a contract between two or more parties.

Boycotting refers to the act of refusing to buy or use a product or service as a form of protest against a company, government, or individual.

A union is an organization that represents workers in a particular industry or profession and aims to protect their rights and interests.

The phrase “adopt an issue” can refer to the process of selecting a particular social or political issue to support or advocate for.

Networking refers to the process of establishing and maintaining relationships with other individuals or organizations for the purpose of exchanging information, resources, or services.

Collusion is a non-competitive, secret, and sometimes illegal agreement between rivals which attempts to disrupt the market’s equilibrium

Winning a union election refers to the process of a group of workers voting to form a union and be represented by it in collective bargaining with their employer. The National Labor Relations Board (NLRB) oversees union elections and certifies the results.

The Gini coefficient is a statistical measure of economic inequality in a population.

A contract worker is an individual who is hired by a company or organization to complete a specific task or project for a predetermined period of time.

A worker cooperative is a type of cooperative where the employees of a company own and democratically manage the business.

Economic inequality refers to the disparities in incomes and wealth in a society.

Net worth refers to the value of assets owned minus the value of liabilities owed at a point in time.

Scarcity refers to the fundamental concept that resources are limited, while human wants and needs are infinite.

Opportunity cost refers to the value of the next best alternative that must be forgone in order to pursue a certain action.

Milton Friedman was a prominent advocate of the monetarist school of thought, which emphasizes the importance of controlling the money supply to stabilize the economy. He believed that the government’s role in the economy should be limited, and that free markets were the best way to allocate resources.

John Maynard Keynes expressed Keynesianism, a macroeconomic theory that emphasizes the importance of government intervention in the economy to stabilize output and employment. He believed that the government should use fiscal policy to stimulate demand during economic downturns, which would help to create jobs and boost consumer spending.

Monetary policy refers to the set of actions taken by a central bank to control the money supply and interest rates in an economy.

The Nasdaq is the world's first automated stock exchange, a global electronic marketplace for buying and selling securities. It lists more than 5,000 companies, including many technology giants, and operates 29 markets enabling the trading of stocks, derivatives, fixed income, and commodities in the U.S., Canada, Scandinavia, and the Baltics. The Nasdaq is also used to refer to the Nasdaq Composite, which is an index of more than 2,500 stocks listed on the Nasdaq exchange.

The S&P 500 is a market-capitalization-weighted stock market index that tracks the performance of 500 of the largest publicly traded companies in the United States. It is widely considered one of the best gauges of large U.S. stocks and the stock market overall, and is used as a benchmark for the overall U.S. stock market and the U.S. economy as a whole.

The Dow Jones Industrial Average (DJIA) is a stock market index that tracks the performance of 30 large, publicly-owned blue-chip companies trading on the New York Stock Exchange (NYSE) and Nasdaq.

The Nine Hour Movement was an international phenomenon that took place in Canada between January and June 1872. It was a significant event in Canadian labor history that aimed to standardize shorter working days. It united union and non-union workers and set the foundation for the Canadian Labor Union.

A Registered Retirement Savings Plan (RRSP) is a retirement savings plan that allows you to save money for retirement without paying taxes on it until you withdraw.

A Guaranteed Investment Certificate (GIC) is a savings product that allows you to deposit money for a set period of time and earn interest on it.

A Tax-Free Savings Account (TFSA) is a Canadian savings account that allows you to save money for any purpose, including retirement, without paying taxes on the interest earned, dividends, and capital gains.

A First Home Savings Account (FHSA) is a registered plan that allows first-time home buyers in Canada to save for their first home tax-free (up to certain limits).

A Registered Education Savings Plan (RESP) is a savings plan that helps parents, grandparents, or other individuals save for a child’s post-secondary education in Canada. The plan is registered with the Canadian government and offers tax-deferred growth on contributions, which means that the money invested in an RESP grows tax-free until it is withdrawn. The maximum amount of money you can get from an RESP is $7,200.

A RDSP is a savings plan intended to help an individual who is approved to receive the disability tax credit (DTC) to save for their long-term financial security. Contributions to an RDSP are not tax deductible and can be made until the end of the year in which the beneficiary turns 59.

Personal finance in economics refers to the management of an individual’s financial resources, including income, spending, saving, investing, and protection.

This is when one business dominate a certain market.

This is when a few businesses dominate a certain market.

Perfect competition is a theoretical market structure in which there are many buyers and sellers, and no single buyer or seller has any significant influence on the market price

In summary, monopolistic competition is a market structure in which many firms sell similar but not identical products.

The products are differentiated by branding, quality, or other features, which allows firms to charge different prices.

Monopsony is a market condition in which there is only one buyer, the monopsonist, who has a controlling advantage over the price and quantity of goods or services.

Passive trade is a buy-and-hold portfolio strategy for long-term investment horizons with minimal trading in the market.

Active trading is a strategy of buying and selling securities for quick profit based on short-term movements in price.

Government intervention in economics refers to the actions taken by a government to influence the economy or market in some way.

A bond is a fixed-income instrument that represents a loan made by an investor to a borrower, typically corporate or governmental.

Asset mix is the composition of an investment portfolio, which is determined based on the risk-taking ability and life-cycle stage of an investor. It is the breakdown of all assets within a fund or portfolio, such as stocks, bonds, cash, and real estate.

Diversification in economics refers to the practice of spreading investments across a variety of securities or asset classes to reduce the risk of loss.

Dividends are payments made by a corporation to its shareholders, usually in the form of cash or additional shares of stock.

In economics, the four factors of production are land, labor, capital, and entrepreneurship. These factors are used to produce goods and services in an economy. 

• Land refers to all natural resources used to produce goods and services, such as water, minerals, and forests. 

• Labor refers to the human effort used to produce goods and services, such as the work done by factory workers, teachers, and doctors. 

• Capital refers to the tools, machinery, and other equipment used to produce goods and services, such as computers, trucks, and factories. 

• Entrepreneurship refers to the ability to organize and manage the other three factors of production, as well as the willingness to take risks and innovate. 

An economic bubble is a phenomenon in which the price of an asset rises rapidly and exceeds its intrinsic value, followed by a sudden decrease in value or a crash.

Bitcoin has been labelled a speculative bubble by many including former Fed Chairman Alan Greenspan and Economist John Quiggin. Nobel Memorial Prize laureate Robert Shiller said that Bitcoin “exhibited many of the characteristics of a speculative bubble”. On 14 March 2014, the American business magnate Warren Buffer said, “Stay away from it. It’s a mirage.”

Tulip mania was a period during the Dutch Golden Age when contract prices for some bulbs of the recently introduced and fashionable tulip reached extraordinarily high levels. Tulipmania happened in the Netherlands in the 1630s and is a classic asset price bubble story.

The Great Recession was a severe global economic downturn that began in 2008 and lasted until 2009. It was triggered by the subprime mortgage crisis in the United States, which led to a sharp decline in housing prices and a surge in mortgage defaults. The crisis then spread to the financial sector, causing a liquidity crisis and a sharp decline in the stock market. The Great Recession was characterized by steep declines in industrial production, mass unemployment, banking panics, and sharp increases in rates of poverty and homelessness.

A depression is a severe and prolonged downturn in economic activity. It is characterized by a sharp fall in economic growth, employment, and production, and can be defined as a recession that lasts longer than three years or that results in a decline of at least 10% in annual GDP.

The Trans-Pacific Partnership (TPP) was a proposed trade agreement between 12 Pacific Rim economies, including Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and the United States. The agreement aimed to deepen economic ties between these nations by slashing tariffs and fostering trade to boost growth. The TPP was designed so that it could eventually create a new single market, something like that of the EU. However, the United States withdrew from the agreement in January 2017, and the TPP could not be ratified as required and did not enter into force

An investment time horizon is the time period where on expects to hold an investment for a specific goal. Investments are broken down into two main categories: stocks (riskier) and bonds (less risky). The longer the time horizon, the more riskier it is and the shorter the time horizon, the less risky it is.

The process of creating a union typically involves the following five steps:

1. Build an Organizing Committee: Leaders are identified and an organizing committee representing all major departments and all shifts and reflecting the racial, ethnic, and gender diversity in the workforce is established. Organizing committee training begins immediately.

2. Adopt an Issues Program: The committee develops a program of union demands (the improvements you are organizing to achieve) and a strategy for the union election campaign. A plan for highlighting the issues program in the workplace is carried out through various organizing campaign activities.

3. Sign-Up Majority on Union Cards: Your co-workers are asked to join the union and support the union program by signing membership cards. The goal is to sign-up a sizable majority. This “card campaign” should proceed quickly once begun and is necessary to hold a union election.

4. Win the Union Election: The signed cards are used (and required) to petition the state or federal labor board to hold an election. It will take the labor board at least several weeks to determine who is eligible to vote and schedule the election. The union campaign must continue and intensify during the wait. If the union wins, the employer must recognize and bargain with the union. Winning a union election not only requires a strong, diverse organizing committee and a solid issues program, but there must also be a plan to fight the employer’s anti-union campaign.

5. Negotiate a Contract: The organizing campaign does not let up after an election victory. The real goal of the campaign, a union contract (the document the union and the employer negotiate and sign, covering everything from wages to how disputes will be handled), is still to be achieved.