S&D
What happens to the price of a good when demand increases and supply stays the same?
The price increases
Which market structure has many firms selling identical products?
Perfect competition
What is an exchange rate?
The price of one currency in terms of another currency
What does GDP stand for?
Gross Domestic Product
What does GDP measure?
The total value of goods and services produced in a country within a given time
What are the two axes on a supply and demand graph?
Price (y-axis) and Quantity (x-axis)
What is a monopoly?
A market with only one seller and no close substitutes.
If the U.S. dollar appreciates, what happens to U.S. exports?
more expensive for foreign buyers, decreasing exports
What is the unemployment rate?
The percentage of the labor force that is unemployed and actively seeking work.
What is human capital?
Labor: The knowledge, skills, and experience of workers that contribute to productivity
Name one factor that can shift the demand curve
Income, tastes, price of related goods, expectations, or number of buyers
Which market structure has a few dominant firms that may collude?
Oligopoly
What is a trade deficit?
When a country imports more than it exports
What is inflation?
A general increase in prices over time.
What is the difference between short-run and long-run economic growth?
Short-run growth --> resources are used more efficiently
Long-run growth --> better factors of production and productivity.
What is the law of supply
As the price of a good increases, the quantity supplied increases
What is product differentiation, and in which market structure is it common?
Making a product unique to compete; common in monopolistic competition
What is the purpose of a tariff?
To tax imports and protect domestic industries
What are the four types of unemployment?
Frictional, structural, cyclical, and seasonal unemployment
How does technological advancement affect economic growth? (elaborate)
It increases efficiency, lowers production costs, and allows for higher output with the same resources.
What is the equilibrium price
The price at which quantity demanded equals quantity supplied
What is the primary characteristic that makes perfect competition different from all other market structures?
Firms are price takers
What is absolute advantage vs. comparative advantage?
Absolute advantage means producing more with the same resources; comparative advantage means producing at a lower opportunity cost.
What is the difference between nominal and real GDP?
Real GDP is adjusted for inflation, while nominal GDP is not
What are the key drivers of long-term economic growth? (at least 2)
Increases in labor, capital, technological innovation, human capital development, and institutional stability.