Economics… - Mr. Dubbsjordandubbs.weebly.com/uploads/2/2/8/6/22866246/4thquarterpac… · Web viewD. Basic Economics Terms. 1. Consumer – People who use resources, goods and

U.S. GovernmentU.S. Government

44thth Quarter Review Packet Quarter Review Packet

RHHS Social Studies RHHS Social Studies Department Department

NOTE TO PARENTS AND STUDENTS:The Maryland High School Assessments (HSAs) are challenging tests that students in the graduating class of 2009 must pass in order to earn a Maryland High School Diploma. These tests ensure that students have mastered fundamental knowledge in Algebra, Biology, English and American Government. In order to measure student progress throughout the school year, and to ascertain that students have acquired the required skills and understanding necessary to demonstrate the knowledge in these courses, students in each of these assessed classes takes a Howard County benchmark test at the end of each academic quarter. The Howard County American Government Quarterly Assessments are smaller versions of the High School Assessment in both content and format. This year, the First Quarterly Assessment was administered in October. The Second Quarterly Assessment was given in January, 2008. The Third Quarter test will be given in March, and the Fourth Quarter test will be given in June.

To assure that students are familiar with the information that was presented earlier in the school year, review packets will be provided. Each packet will contain the key concepts covered in one quarter. This is one of the many tools students should use to prepare for the HSA exam. Students are encouraged to use this packet to review vocabulary and to complete enrichment exercises. Teachers will be assigning the worksheets and the students will be expected to complete them and turn them in to their teacher.

The 1st, 2nd and 3rd Quarter Review Packets have already been provided.

River Hill High School, January 2008: N. Schwartz

Student/Teacher Assessment Sheet

Date Grade Activity Page Numbers

Worksheet #1Economic Terms

2

Worksheet #2Types of Economic Systems

3

Worksheet #3The Business Cycle

5

Worksheet #4Fiscal Policy

7

Worksheet #5/# 6Monetary Policy 9

Worksheet #7Economic Goals

11

Selected Response Questions 14-16

Works Cited

Baltimore County Public Schools, Office of Social Studies, American GovernmentHSA Review Packet

Amsco, Preparing for the Maryland HSA Government

River Hill High School, January 2008: N. Schwartz

Fourth Quarter ReviewFourth Quarter Review Economics

I Foundations of EconomicsA. What is economics?

The study of human efforts to satisfy seemingly unlimited wants through the use of limited resources; Wants v Needs. In economics, a “want” is something desired; while a “need” is something that is necessary (food, water, clothing, shelter)

B. Four Basic Economic Questions - Every Society must answer four basic questions; Decisions about the use and distribution of resources are difficult for every society; Societies can make these choices clearer by answering four basic questions.

1. What should be produced?2. What method should be used?3. How should goods and services be distributed?4. How much should be produced?

C. Factors of Production1. land2. labor3. capital

D. Basic Economics Terms1. Consumer – People who use resources, goods and services to satisfy their economic

wants. (Purchasing a phone, Ipod, car, house)

2. Producer – People or groups who combine resources to make goods and services (APPLE, Toyota, NIKE)

3. Supply – The quantities of resources, goods or services that are offered for sale; Law of Supply: If the supply is high and demand is low, the price goes DOWN;If the supply is low and the demand goes up, the price goes UP

4. Demand – The quantities of resources, goods or services that will be purchased at various prices. Law of Demand: If the demand is high and the supply is high, then the price goes UP. If the demand is low and the supply is low, then the price goes DOWN.

River Hill High School, January 2008: N. Schwartz 1

5. Opportunity Cost – The cost of the loss of the next most desirable good or service that could have been produced with a resource. (Go to movies rather than study for a test; opportunity cost: good grade on test)

6. Scarcity – The condition that results from unlimited wants and limited resources.

Unit IV Worksheet #1 - Match the Economic Term with the Definition

Column A Column B

_____1. People or groups who combine resources to make goods and services

A. Consumer

_____2. What is given up when an economic decision is made B. Demand

_____3. The condition that results from unlimited wants and limited resources

C. Opportunity Cost

_____4. People who use resources, goods and services to satisfy their economic wants.

D. Producer

_____5. The quantities of resources, goods, or services that will be purchased at various prices.

E. Scarcity

_____6. The quantities of resources, goods or services that are offered for sale.

F. Supply


II. Types of Economic Systems – The institutions, laws and other methods used by a society to make decisions about what to produce, how to produce and for whom goods and services are produced.

Traditional Economy

A society in which economic decisions are based on habit, custom and tradition (way things have been done in the past).

A traditional economy exists among native peoples and in developing countries.

Command Economy

Most of the productive services and resources such as land, the industries, the banks and the transportation and communication systems are owned and controlled by the government. The government makes all the decisions about what to sell, how to sell it and whom to sell it to. An example would be communist countries (including Cuba, North Korea, former Soviet Union)

Market Economy

The resources for making the products are owned by individuals (private citizens) rather than owned by the government. In a market economy, buyers and sellers, not the government make the economic decisions on what, how and for whom the goods are produced; there is competition among businesses. An example of a market economy is the United States.

Mixed Economy

Few countries exists in a pure form, most countries uses a mix between central control and market forces; this can be seen in Sweden, Norway; in these countries, the government owns most of the important industries (steel, coal and railroads), while most of the other industries are privately owned.

Unit IV Worksheet #2 - For each of the following, write

T if the statement describes a TRADITIONAL economy; write

C if the statement describes a COMMAND economy and write

M if the sentence describes a MARKET economy.

______ 1. Ring-A-Ding Electronics decides to convert from regular cell phones to video cell phones.

______ 2. Robert herds sheep for his village. His father and grandfather had done the same thing.

______ 3. Government leaders decide to locate all steel production in the nation’s capital.


______ 4. Beta Meatpacking Plant is required to provide a safe and sanitary work environment for the employees.

______ 5. Sally buys a hot dog at Ernie’s because the price is less than at MyDawgs. III. Business Cycle –



Unit IV Activity# 3 – Study the diagram below. Then identify which business cycle phase is described in each statement.

______ 1. Consumers are spending more money and prices are rising.

______ 2. People are spending less money and worried about the economy

______ 3. Most people are employed and business is booming.

______ 4. Businesses lay off workers as the economy cools off.

______ 5. There is a lot of unemployment and little consumer spending.

______ 6. Businesses are growing as more money is invested.

______ 7.On the business cycle, where would you say the US economy is now


IV Fiscal Policy – Government decisions about spending and taxation

Fiscal Policy in a Nutshell

When taxes are cut. The economy grows.

This is done to speed up a slow economy. The government does this so businesses and individuals will spend money.

When taxes rise, the economy shrinks

This is done to slow the growth of the economy and keep inflation low.

As the government spends more, the economy will grow or speed up.

If the government cuts spending, the economy will shrink or slow down.


Unit IV Activity #4 - FISCAL POLICY

Read the information provided and fill in the missing words from the word box. Then complete the chart by placing an “X” in the appropriate box and explaining the economic impact of each policy action.

Fiscal Inflation Recession

__________ Policies are designed to influence the spending of consumers, businesses and the government itself. In general, during a __________ (contraction) the government would want to stimulate the economy by encouraging spending and investment. In times of prosperity __________, inflation is a problem and the government would want to cool off the economy by discouraging spending.

Fiscal Policy (President and Congress)

Policy Action Stimulates the Economy

Cools off the Economy

Effect on consumer demand and/or production

Increase taxes X Consumer demand will go down

Decrease taxes

Tax rebates

Increase spending on government programs

Decrease spending on government


programs


V. Monetary Policy

A. What is the Federal Reserve (the FED)? The central bank of the United States Founded by Congress in 1913

B. What does the FED do? controls the nation’s monetary policy supervises and regulates banking institutions maintains the stability of the economic system provides financial services to depository institutions CONTROLS THE SUPPLY OF MONEY IN CIRCULATION AT ANY

GIVEN TIME

C. How does the Federal Reserve do what it does? There are Three primary instruments the Fed uses to control the economy:

1. Discount rate – The interest rate charged by Federal Reserve Banks for short-term loans to

member banks. When the Fed raises the rate, banks may lend less money; When they lower the rate, banks may lend more money.

2. Reserve Requirements – The portions of deposits that banks must have either in their vault or on

deposit at a Federal Reserve Bank. The larger the reserve requirement, the fewer dollars banks have to lend. Loans become harder to get and interest rates rise.

3. Open Market Operation – Daily buying and selling of securities (e.g. bonds, treasury notes, etc.). The Fed buys securities in order to put more money into circulation When more money is circulating, interest rates tend to drop; consequently

more money is borrowed and spent. When the Fed sells securities, money is taken out of circulation, causing

interest rates to rise and making borrowing more difficult.


Unit IV Activity # 5: MONETARY POLICY – Match the monetary concept with its definition; then complete the chart that follows

Column A Column B_____ 1. The central bank of the United States that controls monetary policy. A. Reserve Requirements

______2. When the FED buys or sells government securities. B. Interest Rates

_____. 3. The percentage of funds that banks are required to keep on deposit. C. Federal Reserve Systems (FED)

______ 4. The price paid for borrowing money for a period of time D. Open- Market Operations.

Unit IV Activity # 6 - MONETARY POLICY (The FED)

Indicate whether the action would increase or decrease the money supply, and whether it is used during a recession or inflation. Parts of the chart have been completed for you.

Policy Action Increases or Decreases the Money Supply

Action dealing with recession or inflation

Buy Government Securities Increases Recession

Sell Government Securities

Raise interest rates Inflation

Lower interest rates

Raise the reserve requirement Decrease

Lower the reserve requirement


VI. U.S. Government Policy Goals

The Goals Are:

1. Economic Growth - To make sure that the economy is expanding

2. Stable Prices – To make sure that prices are kept at a reasonable level and that inflation is low

3. Full Employment – To make sure that everyone who is capable or working and wants to work has a job.

To measure these goals, the government uses the following indicators (measurements)

1. To measure economic growth, we use Gross Domestic Product (GDP) – The total value of all the goods and services in a country in a given year.

2. To measure stable prices, we use the Consumer Price Index (CPI) – A measure of changes over time in the prices of a set of goods and services.

3. To measure Full Employment, we use the unemployment statistics – A measure of the percentage of workers who are out of work.


Unit IV Activity # 7 – Study the chart listing goals for maintaining a prosperous economy and the indicator that can be used to assess each goal. Indicate which indicator would be affected by each headline below.

Public Policy Goal Economic indicator

Stable Prices A. Consumer Price Index

Full employment B. Unemployment Statistics

Economic Growth C. Gross Domestic Product (GDP)

__________1. “US Airways to Lay off 1, 000 Employees”

__________2. “Inflation Rate to be the Highest Since the 1980’s”

__________3. “ Ford to Produce More SUV’s this Year.”

__________4. “Prices for Consumer Goods Down 5%”

__________5. “More Job Opportunities for the Class of 2008”

__________ 6. “Dell to produce fewer computers in 2009”

__________7. “Oil Prices set an all time High”

__________8. “GM to Shut Down its plant; plans to it move to Mexico.”

__________9. “IPhone Sales Skyrocket; Apple to Increase Production”

__________10. “Home Sale Plummet; Housing Prices Decline”


VI. Additional Economics Vocabulary

Budget A financial plan that serves as a guide for future spending

Budget Deficit The amount by which planned or actual spending is less than the revenue (money) that is taken in.

Budget surplus The amount by which revenue available to pay for budgeted expenses is more than the planned or actual spending

Business Cycle A repeating pattern of economic expansion and contraction over time (prosperity, recession, depression, recovery)

Consumer Price Index (CPI)

A measure of changes over time in the prices of a set of goods and services

Economic Sanctions Economic penalties, such as limits on trade, that are placed on a nation to pressure it to change its behavior or policies

Economic Wants Human needs and desires that can be satisfied by consuming goods and services

Federal Reserve System

The central bank of the United States, consisting of 12 regional reserve banks and 24 Branch Banks, which controls interest rates and the economy’s supply of money and credit.

Fiscal Policy A government’s plan to promote economic stability and manage growth by raising or lowering taxes, levels of spending, or both.

Free EnterpriseBusiness activity between privately owned companies rather than

government-companies; also, the freedom to organize and operate businesses without interference by government.

Gross Domestic Product – (GDP)

The total value of all the goods and services a country produces in one year

Inflation A rise in the general level of prices for goods and services; also, a change in the value of the money.

Monetary Policy A government’s plan for managing the flow of money and credit in its economy in order to realize its economic goals

National Debt The total amount of money owed by a national government.

Natural resources Land, water, trees, minerals, and animals that can be used to produce goods and services


ProductivityA measure of the amount of goods and services produced by a

worker or group of workers, a company or industry, or an economy in a given period of time

Recession A slowdown in a nation’s economic activity for at least two consecutive economic quarters

Revenue The total income of a business or government

Scarcity In economics, the condition that results when the demand for a good or service is greater than the supply

Services Actions such as medical care, police, and fire protection, and education that satisfy economic wants and needs.

Socio-Economic Goals

A set of social aims related to economics that guide government, individuals and society in making decisions

Supply and Demand The interaction between a seller and a buyer that sets the price of a good or service.

Tax Money that individuals and businesses are required to pay the government

Trade The exchange, purchase, or sale of resources, goods and services.


VII. 25 Selected Response Questions - Economics

1. On January 1, 1999, the Euro became the common currency for eleven European countries. The adoption of the Euro created a region based on a commonA. political ideologyB. defense strategyC. economic interestD. cultural characteristic

2. Which of these is an economic benefit of lower taxes?A. better public servicesB. more consumer spendingC. expanded government programsD. larger number of government employees

3. Which of these is a characteristic of a market economy?A. limited business rightsB. competition between businessesC. government control and ownership of

propertyD. Nationwide pricing rules for goods and

services

4. Which of these BEST describes the United States’ economic system?A. mixedB. marketC. commandD. traditional

5. Which of these is an example of government fiscal policy?A. creating budgetsB. adjusting the discount rateC. conducting open market operationsD. changing the reserve requirement

6. Which of these is the responsibility of the Federal Reserve System?A. collecting taxesB. lending money to individualsC. controlling the money supplyD. approving government budgets

7. Which of these is a characteristic of an economic downturn?A. increased employment levelsB. increased consumer spendingC. decreased government regulationD. decreased production of goods and

services

8. The federal government allows individuals to take income tax deductions for contributions they make to charities. This practice results in a loss in revenue for the government. Which of these BEST explains why the government allows this type of tax deduction?A. to encourage charities to hire more

workersB. to encourage people to pay their taxes on

timeC. to increase the benefits provided by the

charitiesD. to increase the amount of government

regulations.

9. Which of these is a way the government promotes economic equity and fairness?A. redistributing incomeB. increasing interest ratesC. monitoring tax rates on exportsD. decreasing the money supply

10. Which of these is an economic goal of the United States government policy?A. to limit competitionB. to create a classless societyC. to promote full employmentD. to own the means of production


11. The federal government passed a law reducing the amount of lumber that can be cut from national forests. Which of these could be a result of the law?A. increased production of wood productsB. higher prices for consumers or wood

productsC. decreased profits for manufacturers of

non-wood productsD. decreased taxes for non-wood

manufacturing industry

12. Which of these is characteristic of a traditional economy?A. people rely heavily on hunting and

farmingB. large corporations compete for businessC. the government generally owns the

means of productionD. technological advancements encourage

growth.

13. Which of these is the MAIN goal of both the World Bank and the International Monetary Fund?A. to improve the economies of member

nationsB. to promote democratic reforms in

member nationsC. to increase reliance on agriculture in

member nationsD. to support the educational institutions of

member nations

14. If tax revenues decrease, what would be the effect on the state of Maryland?A. Maryland would reduce tax rates.B. Retail businesses would lower pricesC. Maryland would reduce funding for some

programsD. The federal government would replace

lost income from taxes.

15. Which of these is usually true in a market economy?A. Businesses that are inefficient risk going

out of businessB. Most farms are owned and operated by

the governmentC. Workers are restricted by the government

from changing jobsD. Consumers have little choice in the types

of goods they may buy.

16. Read the headline below

Co Continued Rise in Unemployment Rate Leads Federal Reserve to Increase the Money Supply

Which of these BEST explains the reason for the Federal Reserve’s action?

A. to encourage consumers to stop spending money

B. to make it easier for businesses to borrow money to expand

C. to give businesses incentives to decrease their production of goods and services

D. to provide more funds for the federal government to use for entitlement programs

17. Read the news article below

ThThe Organization of Petroleum Exporting Countries (OPEC) decided yesterday to cut crude oil production. A similar action earlier this year has led to a decrease in the United States’ fuel supply.

Which of these would LEAST LIKELY be a response of the United States government to the OPEC decision?

A. fund research of alternative energy sources

B. Support increased domestic mining of fossil fuels

C. encourage domestic energy conservation programs

D. file lawsuits against foreign oil-exporting countries.


18. Which of these actions by the federal government would MOST LIKELY reduce inflation?A. increasing both spending and the money

supplyB. decreasing spending and the money

supplyC. increasing loans to consumersD. decreasing the interest rates

19. The federal minimum wage in 2001 was $5.15 an hour.

Which of these BEST describes why the federal government would raise the minimum wage?

A. to help workers find employmentB. to help workers’ wages keep up with

inflationC. to increase the taxes on workers’ wagesD. to make sure all workers receive the same

pay

20. Which of these would MOST LIKELY take place in a command economy?A. Industrial leaders agree to control pricesB. Stock traders create wealth through

buying and sellingC. Government leaders decide how goods

will be producedD. Consumers decide the sales policies of

business owners

21. The government of China tells factory managers to increase their use of computers in manufacturing.

What economic question is MOST affected by the government’s actions?

A. what to produceB. how to produceC. for whom to produce

D. when to produce

22.Which of these is MOST CLOSELY associated with an economic recession?A. an increase in stock pricesB. a decrease in demand for laborC. a decrease in the minimum wageD. an increase in consumer spending

23. Which of these persons would the United States government count as unemployed?A. a photographer who is her own bossB. a waiter who earns most of his money

from tipsC. a person who is retiredD. an accountant who quits her job to look

for other work.

24. Which of these is MOST OFTEN encouraged by the government in a command economy?A. national production goalsB. inherited occupational rolesC. private ownership of propertyD. competition between businesses

25. Which of these government actions is the Consumer Price Index MOST associated?A. imposing economic sanctionsB. reducing unemploymentC. measuring the rate of inflationD. offering federal business loans

26. What is the opportunity cost for state governments that spend state money during natural disasters?A. Main highways between states may be

blockedB. Prices for snow removal equipment may

increaseC. Other services offered by the state may

have to be cutD. State governments may receive additional

highway funds.


Documents

Economics… - Mr. Dubbsjordandubbs.weebly.com/uploads/2/2/8/6/22866246/4thquarterpac… · Web viewD. Basic Economics Terms. 1. Consumer – People who use resources, goods and