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What Do You Know About Economics?
From:
Greg Womack -- Oklahoma Financial Advisor Greg Womack -- Oklahoma Financial Advisor
Oklahoma City, OK
Thursday, November 3, 2022


What Do You Know About Economics?
 

WHAT DO YOU KNOW ABOUT ECONOMICS? Adam Smith defined economics as "an inquiry into the nature and causes of the wealth of nations." Alfred Marshall offered an alternative option: Economics is the study of humans "in the ordinary business of life." No matter how you define it, economics shapes and influences our lives. Test your knowledge of all things economic by taking this brief quiz.

 

1. The first version of the board game Monopoly was created to help people understand the:

    a. Harm done by monopolies

    b. Advantages of monopolies

    c. How family members think and collaborate

    d. None of the above

 

2. What is the paradox of thrift?

    a. Saving more can lead to economic growth

    b. Shoppers can find valuable items in thrift stores

    c. Saving more can lead to economic slowdown

    d. Spending less today could mean having more in retirement

 

3. Which of the following is not thought to cause prices to increase?

    a. The Fed raising rates

    b. Consumer spending

    c. Demand for goods increasing

    d. People thinking prices will move higher

 

4. Generally, macroeconomics considers the role of governments in a market economy. What historical event led to the study of macroeconomics?

    a. The Credit Crisis of 1772

    b. World War II

    c. The Great Depression

    d. The Oil Crisis of 1973

 

The answers can be found below.

 

Answers:

  1. Originally called "The Landlord's Game", Monopoly was created by Elizabeth Magie to demonstrate what she considered to be the destructive effect of monopolies.
  2. While saving is good for the individual, it can be detrimental to a nation's economy. When people save more and spend less, national economic growth tends to slow.
  3. The Fed raises rates to reduce demand, which can help bring prices down, lowering inflation.
  4. The Great Depression led to the study of macroeconomics.

 

You can reach out to Greg Womack with any questions at greg@womackadvisers.com or (405) 340-1717.

 

Best regards,

Womack Investment Advisers, Inc.

 

Sources:

https://www.investopedia.com/ask/answers/070615/what-difference-between-earnings-and-profit.asp

https://lipperalpha.refinitiv.com/wp-content/uploads/2022/10/TRPR_82201_20221028.pdf

https://www.reuters.com/business/energy/wrapup-global-oil-giants-rake-massive-profits-third-quarter-2022-10-28/

https://www.barrons.com/articles/stock-market-dow-nasdaq-dot-com-bubble-51667004324?refsec=the-trader&mod=topics_the-trader (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2022/10-31-22_Barrons_Shades%20of%20the%20Dot%20Com%20Bust_4.pdf)

https://www.bea.gov/sites/default/files/2022-10/gdp3q22_adv.pdf [See Table 4]

https://www.barrons.com/livecoverage/stock-market-today-102822/card/stocks-drop-after-brutal-week-for-big-tech-earnings-BpI0odeClhgz6Ovfw41T (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2022/10-31_22_Barrons_Stocks%20Rallied%20After%20a%20Brutal%20Week%20for%20Tech%20Earnings_6.pdf)

https://www.bloomberg.com/markets/stocks

https://home.treasury.gov/resource-center/data-chart-center/interest-rates/TextView?type=daily_treasury_yield_curve&field_tdr_date_value_month=202210

https://corporatefinanceinstitute.com/resources/knowledge/economics/what-is-economics/

https://www.brainyquote.com/quotes/john_kenneth_galbraith_105472?src=t_economics

https://www.atlantafed.org/economy-matters/quiz/2018/0621-terms-and-conditions (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2022/10-31-22_Federal%20Reserve%20Bank%20of%20Atlanta_11.pdf)

https://research.stlouisfed.org/publications/page1-econ/2012/05/01/wait-is-saving-good-or-bad-the-paradox-of-thrift/

https://www.thebalancemoney.com/causes-of-inflation-3-real-reasons-for-rising-prices-3306094

https://www.jstor.org/stable/2077848  

News Media Interview Contact
Name: Greg Womack
Title: President
Group: Womack Investment Advisers
Dateline: Edmond, OK United States
Direct Phone: 405-340-1717
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