What are the three core choices in the economy? what, how, and for whom Define “economy”. the grand sum of all production and consumption activities Define “scarcity”. the limitation of a nation’s resources What are Read more…
lower RRR decrease interest rates, decrease unemployment, increase RGDP, increase price levels raise RRR increase interest rates, increase unemployment, decrease RGDP, decrease price levels deduction an amount that can deducted from taxable income S&P 500 Read more…
absolute advantage the ability to produce something more efficiently capital productive equipment or machinery comparative advantage the ability to produce something with a lower opportunity cost economics a social science that studies how resources are Read more…
Gross Domestic Product (GDP) the *total market value* of all final goods and services produced within a given period by factors of production located within a country a. Final goods and services: goods and services Read more…
When is the output gap negative? When Potential GDP > Real GDP A measure of both the incomes and expenditures of an economy is? Gross Domestic Product The calculation for the GDP deflator is? (Nominal Read more…
Chapter 6 … What is a recession A decline in GDP and unemployment (2Q) Real GDP Measure that reflects the value of all goods and services produced in a given year, expressed in base-year prices. Read more…
Microeconomics the study of individual units that comprise the economy; a single household’s decisions: what jobs to take, how to spend income; a single firms decisions: output, pricing Macroeconomics the study of economic-wide issues: key Read more…
Comparative advantage Each nation specialized in a product for which its opportunity cost is lower in terms of the production of another product and the nations trade. Free trade Benefits a nation as a whiling Read more…
Economics The social science that deals with the analysis of material problems and how societies allocate scarce resources to satisfy human wants Macroeconomics The study of aggregated economic activity such as the forces that determine Read more…
Business Cycle alternate periods of economic expansion and economic recession, fluctuations in economic activity, such as employment and production Recession an economic slump; a depression; a decline Real GDP or Real Gross Domestic Product a Read more…
business cycle Recurring increases and decreases (fluctuations) in the level of in economic activity over periods of years; consists of peak, recession, trough, and expansion phases. (such as employment and production) economics the study of Read more…
Scarcity the limited nature of society’s resources Economics the study of how society manages its scarce resources Efficiency the property of society getting the most it can from its scarce resources Equality the property of Read more…
Natural Resources the lands, water, metals, minerals, animals and other gifts of nature that are available for producing goods and services. Scarcity the perpetual state of insufficiency of resources to satisfy people’s unlimited wants. Economics Read more…
The Business Cycle Gives us insight on our economy Economic Boom 5% or greater increase Economic Bust When the economy shrinks by 5% Law of demand Quantity of a good demanded at a given time Read more…
What is opportunity cost? what you give up in order to get something else A college cost $20,000 per year. The job you give up to go to college pays $30,000 a year. What is Read more…
Microeconomics individual units that comprise the economy ex. a person choosing b/t taking a job in GA or FL ex. firm choosing to open another factory Macroeconomics the study of the broader economy ex. inflation Read more…
microeconomics the study of how households and firms make decisions and how they interact in markets macroeconomics the study of economy-wide phenomena, including inflation, unemployment, and economic growth expenditure for an economy as a whole, Read more…
Economy How society manages it’s scarce resources – or all it’s resources Scarcity The limited nature of society’s resources Efficiency The property of society getting the most it can from its scarce resources Equality The Read more…
The aim of study of macroeconomics is to examine the economy’s behavior. Which best describes why a government’s actions are important within macroeconomics Government can use policy to influence the economy. This is a graph Read more…
Purchasing Power Parity (PPP) A method of comparing income by looking at the domestic purchasing power of money in differnent countries. Restructuring Changing the underlying economic institutions. Dual Economy The existence of two sectors: a Read more…