Ap Macroeconomics Chapter 1

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Lack of enough resources to satisfy desired uses of those resources
Factors of production
resource inputs used to produce goods and services such as land, labor, and capital, and entrenpreneurship
Final goods produced for use in the production of other goods, e.g., equipment, structures.
The assembling of resources to produce new or improved products and technologies.
The study of how best to allocate scarce resources among competing uses.
opportunity cost
The most desired goods or services that are forgone in order to obtain some thing else.
production possibilities
The alternative combinations of final goods and services that could be produced in a given time period with all available resources and technology
Maximum output of a good from the resources used in production
economic growth
An increase in output (real GDP); an expansion of production possibilities
market mechanism
The use of market prices and sales to signal desired outputs (or resource allocations).
laissez faire
The doctrine of “leave it alone,” of nonintervention by government in the market mechanism.
mixed economy
An economy that uses both market signals and government directives to allocate goods and resources
market failure
An imperfection in the market mechanism that prevents optimal outcomes
government failure
Government intervention that fails to improve economic outcomes.
The study of aggregate economic behavior, of the economy as a whole.
The granting of small (“micro”), unsecured loans to small business and entrepreneurs.
ceteris paribus
The assumption of nothing else changing.
Categories: Macroeconomics