Why do many American companies choose to have their products made overseas? - cheaper labor
Give 4 examples of how a country at war can negatively affect trade? - workers leave to become
soldiers, workers are wounded or killed, factories destroyed, trade with other countries disrupted
A group of workers who organize themselves and negotiate with business owners for higher wages and
benefits is called what? - labor union
Why do high taxes on income discourage efforts by individuals to generate more income? - much of
what they earn has to go to the government
How might regulation increase the cost of goods? - companies pass on the costs of regulations to
consumers in the form of higher prices
What are three examples of institutions that help an economy operate? - corporations, labor unions,
banks
What term describes economic effects external to the direct production of goods - externalities
What is the meaning of the term gross domestic product (GDP)? - a measure of the value of all of the
finished goods and services produced within a country
Define poverty rate. - The percentage of the population that lives below what the government
determines to be the minimum income to provide needed goods and services.
What is microeconomics? - the study of how households and firms make decisions and how they
interact in markets
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