7 & 8 Study Guide - Market Fail & Gov Intervention

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Across
  1. 4. 13 Expectations matter: when buyers expect prices to rise due to ___ ___ , they spend their money as quickly as they can. This makes [same] worse.
  2. 8. 29 66% of U.S. citizens use insurance through a private company, usually provided by their ____ .
  3. 11. 7 Inflation always makes current prices higher than past prices, so to compare prices between years we use ___ prices that are adjusted for inflation, not ___ prices which are NOT adjusted for inflation.
  4. 12. 7 When there is a ___ of some resource & products become scarce, this drives up prices. This type is called cost-push inflation.
  5. 13. 29 33% of U.S. citizens use insurance through the government, a plan funded by ___ . e.g. medicare, medicaid.
  6. 14. 7 Venezuela’s government was incompetent, but the real cause of their ___ & rising prices was printing money. They should have increased production instead.
  7. 15. 7 When the economy is growing & buyers have a ___ of ___ , they create inflation by bidding up prices; This creates demand-pull inflation.
Down
  1. 1. 13 Depression/Recession occurs when business produces more goods than people can buy, GDP ___ , & you have ___ unemployment.
  2. 2. 13 Stagflation occurs when you have ___ (high prices), but at the same time your economic output ___ (unemployment).
  3. 3. 7 To compare prices from past years, we adjust for inflation by creating a ___ ___ & adding products to it that most buyers use, like milk, sewage bills, & flour.
  4. 5. 7 A bubble occurs when the price of a ‘single product’ rises due to the ___ exuberance of several buyers; people feel mania & want to get rich quick.
  5. 6. 13 Hyperinflation causes prices to change many times a day, but the real damage is that it ___ ___ . Retirement is not an option for the elderly.
  6. 7. 7 Consumer ___ ___ is what economists use to remove inflation from prices, so they can compare today’s prices to past prices. Otherwise, today’s prices appear more than past prices.
  7. 9. 13 Expectation matters: During a deep ___ , buyers expect prices to fall, so they wait to spend their money. Less spending makes the [same] worse.
  8. 10. 13 Governments create ___ when their production output is at capacity (cannot produce more) & they are still adding money to the economy.