Circular Flow of Income
Shows how spending is magnified in an economy.
What is the multiplier effect?
When output increases.
What is actual growth?
Varies between countries but can be 3%.
What is full employment?
A medium of exchange, a unit of account, a store of value, and a standard of deferred payment.
What are the functions of money?
Yay, you took a risk.
An economy composed of just households and firms.
What is a closed economy?
Has four phases (peak, trough, downtown, and upturn) to tell how the economy is doing.
What is the Business Cycle?
Workers are willing to work at the current wage rate but cannot find a job.
What is involuntary unemployment?
Medium of exchange, consists of notes in circulation.
What is narrow money?
Oh no, such a risk!
-200
An economy comprises households, firms, the government, and a foreign market.
What is an open economy?
A change in business confidence, money supply, political cycles, and shocks.
What are fluctuations in AD or AS?
The ability to move from one job to another, and the ability to move somewhere for a job.
What is occupational and geographical mobility?
Reserves and loans.
What are two options for banks?
Really, another risk!
Take 200 points from another team.
It is determined where AD=AS.
What is national income?
Allows for greater equity and a more even distribution of income.
What is the impact of Economic growth?
Refusal to cut wages, trade/labor unions, and minimum wage.
What are the causes of disequilibrium unemployment?
Increase bank lending, increase government spending, and the sale of bonds.
What are the causes of change to the Money Supply?
Wow, you just won't stop.
+400
When aggregate spending exceeds the potential output of the economy.
What is an inflationary gap?
Using and conserving resources and impact on the environment.
What are ways of sustainable economic growth?
The quality of education, quantity of information, degree of labor, and national minimum wage legislation.
What are supply-side factors that determine the natural rate of unemployment?
Demand of money = Supply of money
What is the determinate of interest rates?
Okay, for real, was this a good idea?
-500 from each team.