AST CORE 1. Unit 3. The U.S.
Economy – From farming to technology
An economy is the way that goods and services are produced and distributed. The
economy of a country includes the activities of all producers and consumers
within that country. A strong economy produces many goods and services.
Today, the gross domestic product (GDP) of the United States is the highest of
any country in the world. The GDP is the total amount of goods and services
produced within a country in a year. So having the highest GDP in the world
means that the U.S. has the largest economy in the world.
The early American economy was based on farming. The majority of colonists
who came to America from Europe in the 1600s and 1700s were farmers. Later,
the manufacturing and service industries made up the largest parts of the
economy. Today, the finance and technology industries are the fastest-growing
parts of the economy.
In the United States, people and companies are part of a free market economy. In
a free market, people choose what to produce and what to buy. Farmers decide
what crops to plant, factory owners decide what kinds of products to sell. And
consumers consider opportunity cost when they make decisions about buying
these goods and services. People can choose how they earn and spend their
money without government interference. The American economy is also based
on the free-enterprise system. This means that people can own and run their own
businesses, people who start and run their own businesses are called
entrepreneurs.
In most cases, people who sell goods or services decide on their prices according
to the law of supply and demand. If the supply is large yet demand is low, the
price usually goes down. If the supply is scarce or small yet demand is high, the
price often rises.
Vocabulary
distribute
producer
consumer
economy
gross domestic product (GDP)
be based on
majority
colonist
manufacturing industry
finance industry
technology industry
fastest-growing
free market economy
manufacturer
storeowner
consider
opportunity cost
make a decision
interference
free-enterprise system
run own’s business
entrepreneur
in most cases
law of supply and demand
go down
scarce
goods
within
crop
gross
domestic
product
primary factor
determine
government regulation
transition
highlight
describe
preference
trace
compare
infer
rely on
heavily
sector
significant
context
economic regulations
guide
distribution
trade balance
feature
competition
government officials
tax
decision
mandate
regulate
consider
consequence
popular
attract
funding
vital
economy
control
set price
business activity
corporation
abundant
rare
definition
employees
phrase
market
restriction
define
in terms of
dominate
Real estate
be … related to
majority
participate in
mention
evolution
shift
solely
avoid
desire
availability
dictate
production levels
ignore
suggest
interfere
finance
representative
characterize
ownership
government ownership
private ownership
business operations
emphasize
evolving
stability
agricultural outputs
reduction
alternative
available
desirable
colonist
industrial
subsidy
receive
essential
population growth
economic output
government agency
adjust
regardless
indicate
FURTHER QUESTIONS
1. What is the primary factor that determines the price of goods or services in a free market economy?
- A. Government regulations
- B. The law of supply and demand
- C. The gross domestic product
- D. The number of entrepreneurs
2. How does the text explain the transition of the U.S. economy from farming to technology?
- A. It highlights the increasing role of government.
- B. It describes changes in consumer preferences.
- C. It traces the shift from agriculture to manufacturing and then to finance and technology.
- D. It compares the U.S. economy with other countries.
3. What can be inferred about the role of entrepreneurs in the American economy?
- A. They rely heavily on government support.
- B. They are the primary drivers of economic growth.
- C. They have little impact on the free-enterprise system.
- D. They mostly work in the agriculture sector.
4. What is the GDP and why is it significant in the context of the U.S. economy?
- A. The Government Development Program; it supports small businesses.
- B. Gross Domestic Product; it measures the total goods and services produced within a country.
- C. General Domestic Policy; it guides economic regulations.
- D. Global Distribution Percentage; it represents international trade balance.
5. Which industries are mentioned as the fastest-growing parts of the current U.S. economy?
- A. Farming and manufacturing
- B. Manufacturing and service
- C. Finance and technology
- D. Agriculture and finance
6. What is a key feature of a free market economy as described in the text?
- A. Government sets all production goals.
- B. People have the freedom to choose what to produce and buy.
- C. Prices are fixed by the government.
- D. There is no competition among businesses.
7. What time period does the text mention for the majority of colonists being farmers?
A. 1500s and 1600s B. 1600s and 1700s C. 1700s and 1800s D. 1800s and 1900s
8. Who are entrepreneurs according to the text?
- A. Government officials
- B. Consumers who save money
- C. People who start and run their own businesses
- D. Farmers who grow multiple crops
9. What does the term "free-enterprise system" mean as used in the text?
- A. A system where the government owns all businesses
- B. A system where businesses are owned and run by private individuals
- C. A system with no taxes on businesses
- D. A system where only essential goods are produced
10. Which of the following is NOT a part of the American economy mentioned in the text?
- A. Farming
- B. Manufacturing
- C. Technology
- D. Government control
11. According to the text, what does NOT influence consumer decisions in a free market?
- A. Opportunity cost
- B. Personal preferences
- C. Government mandates
- D. Supply and demand
12. Which of the following is NOT a characteristic of the American free market economy as described in the
text?
- A. People decide what to produce.
- B. Prices are regulated by the government.
- C. Consumers consider opportunity cost.
- D. Entrepreneurs run their own businesses.
13. What might be a consequence of a low supply and high demand for a product?
- A. The price will go down.
- B. The product will become less popular.
- C. The price will go up.
- D. The government will intervene.
14. Why might the finance and technology industries be described as the fastest-growing?
- A. They rely heavily on agricultural outputs.
- B. They attract the most government funding.
- C. They are less influenced by the free market.
- D. They are increasingly vital in a modern economy.
15. What can be inferred about the role of government in the American free-enterprise system?
- A. The government controls most businesses.
- B. The government sets prices for goods and services.
- C. The government has minimal interference in business activities.
- D. The government owns the largest corporations.
16. What does the word "scarce" mean in the context of supply and demand?
A. Abundant B. Rare C. Expensive D. Popular
17. What is the best definition of "opportunity cost" as used in the text?
- A. The money spent on a purchase
- B. The time taken to make a decision
- C. The value of what is given up when making a choice
- D. The profit made from selling goods
18. Which word in the text is closest in meaning to "entrepreneurs"?
A. Consumers B. Producers C. Farmers D. Employees
19. What phrase describes the ability to produce and buy what people want in a free market?
- A. Government regulation
- B. Consumer freedom
- C. Economic control
- D. Market restriction
20. How does the text define the American economy in terms of market type?
- A. Command economy
- B. Mixed economy
- C. Free market economy
- D. Traditional economy
21. What historical economic sector dominated before manufacturing and services in the U.S.?
A. Technology B. Agriculture C. Finance D. Real estate
22. How is GDP related to the economy's strength according to the text?
- A. Higher GDP means a weaker economy.
- B. Higher GDP indicates a stronger economy.
- C. GDP has no relation to economic strength.
- D. Lower GDP means a stronger economy.
23. What aspect of the economy did the majority of early American colonists participate in?
- A. Service industry
- B. Farming
- C. Manufacturing
- D. Technology
24. Which industry is NOT mentioned as part of the U.S. economy's evolution in the text?
- A. Manufacturing
- B. Technology
- C. Mining
- D. Finance
25. What choice do factory owners have in a free market?
- A. They must produce government-mandated products.
- B. They decide what kinds of products to sell.
- C. They are limited to producing agricultural goods.
- D. They cannot change their product lines.
26. What does "gross domestic product" specifically measure?
- A. International trade balance
- B. Total goods and services produced within a country
- C. Government spending
- D. Number of new businesses started
27. What historical shift does the text describe regarding the U.S. economy?
- A. From technology to agriculture
- B. From manufacturing to services
- C. From farming to manufacturing and then to technology
- D. From finance to manufacturing
28. What does the free-enterprise system allow individuals to do?
- A. Own and run their own businesses
- B. Depend solely on government support
- C. Limit their businesses to certain products
- D. Avoid competition
29. How is the "law of supply and demand" best summarized?
- A. Government sets prices based on needs.
- B. Prices are determined by the availability and desire for goods.
- C. Consumers dictate production levels.
- D. Businesses ignore consumer preferences.
30. What does the text suggest about the government's role in a free market?
- A. The government heavily regulates prices.
- B. The government interferes in production decisions.
- C. The government provides guidelines but minimal interference.
- D. The government controls supply chains.
31. What industry followed farming as a major part of the American economy?
A. Finance B. Technology C. Manufacturing D. Real estate
32. According to the text, what can people freely choose in a free market economy?
- A. Their government representatives
- B. What crops to plant and products to sell
- C. How much tax to pay
- D. Which laws to follow
33. What is the significance of "opportunity cost" in consumer decision-making?
- A. It determines government policies.
- B. It influences what consumers decide to purchase.
- C. It has no impact on consumer choices.
- D. It sets fixed prices for goods.
34. What historical period does the text refer to when mentioning the early American economy?
A. 1800s B. 1700s C. 1600s D. Both B and C
35. What does the term "free market" imply about economic choices?
- A. Choices are dictated by government rules.
- B. Individuals have the freedom to make their own economic decisions.
- C. All businesses are owned by the state.
- D. There is no competition.
36. What determines the price if the supply is large but the demand is low?
- A. The price goes up.
- B. The price goes down.
- C. The price stays the same.
- D. The government sets a new price.
37. What type of economy does the United States have?
A. Command economy C. Traditional economy
B. Free market economy D. Mixed economy
38. What characterizes the fastest-growing parts of the U.S. economy today?
- A. They are all related to agriculture.
- B. They include finance and technology.
- C. They are declining in importance.
- D. They are limited to manufacturing.
39. What does "free-enterprise system" encourage according to the text?
- A. Government ownership of businesses
- B. Private ownership and business operations
- C. Fixed pricing for goods
- D. Limited consumer choices
40. What best describes the role of consumers in a free market?
- A. They follow government instructions on purchases.
- B. They make buying decisions based on opportunity cost.
- C. They cannot choose what to buy.
- D. They have no influence on prices.
41. What aspect of the economy does the text emphasize as evolving from the 1600s to today?
- A. The role of government in business
- B. The primary industries driving economic growth
- C. The stability of agricultural outputs
- D. The reduction in consumer choices
42. What does "opportunity cost" involve when making economic decisions?
- A. The most expensive option available
- B. The next best alternative given up
- C. The total money spent on goods
- D. The least desirable option
43. How does the text describe the economic activities of colonists in the 1600s and 1700s?
- A. Primarily industrial workers
- B. Mainly farmers
- C. Mostly entrepreneurs
- D. Predominantly service providers
44. What does a "free-enterprise system" allow people to do?
- A. Avoid paying taxes
- B. Run their own businesses
- C. Receive government subsidies
- D. Produce only essential goods
45. What does "gross domestic product" measure in a country?
- A. Population growth
- B. Economic output
- C. Government spending
- D. International trade balance
46. What was the primary economic activity in early America according to the text?
A. Manufacturing B. Technology C. Farming D. Finance
47. How does the "law of supply and demand" affect prices?
- A. Government agencies set prices.
- B. Prices adjust based on supply and demand.
- C. Prices are fixed regardless of supply.
- D. Demand does not influence prices.
48. What industry is currently a major part of the U.S. economy's growth?
A. Agriculture B. Technology C. Manufacturing D. Real estate
49. What does the term "free market economy" indicate about production and consumption?
- A. The government mandates production levels.
- B. Individuals have freedom in production and consumption.
- C. Consumption is controlled by the state.
- D. Production choices are limited by regulations.
50. What sector experienced significant growth after the early farming economy?
A. Service industry B. Technology C. Manufacturing D. Real estate
GRAMMAR QUESTION
1. An economy is the way that goods and services are produced and ____.
A. distributing B. distributed C. distributes D. distribute
2. The GDP is the total amount of goods and services ____ within a country in a year.
A. produce B. producing C. produced D. produces
3. The majority of colonists who came to America from Europe in the 1600s and 1700s ____ farmers.
A. was B. were C. is D. be
4. In a free market, people choose what ____ and what to buy.
A. to produce B. produces C. produced D. producing
5. People can choose how they earn and spend their money ____ government interference.
A. with B. from C. without D. by
6. This means that people can own and ____ their own businesses.
A. ran B. run C. running D. runs
7. If the supply is large yet demand is low, the price usually ____ down.
A. go B. goes C. going D. gone
8. The early American economy was based ____ farming.
A. of B. at C. in D. on
9. The finance and technology industries are the fastest-____ parts of the economy.
A. grow B. grew C. grown D. growing
10. Entrepreneurs are people who start and ____ their own businesses.
A. run B. runs C. ran D. running
