Econ Jargon
What is the economic term for "unlimited wants and limited resources"?
What is the economic principle that explains why consumers typically buy less of a good when its price rises?
Law of Demand
What does GDP measure?
The total value of goods and services produced in a country in a year.
What market structure has firms selling identical products?
Perfect competition
Who controls fiscal policy in the U.S.?
Congress and the President
What is the next best alternative called, that is given up when a decision is made?
Opportunity Cost
A rise in consumer income, assuming the goods are normal, with an increase in supply will do what to the equilibrium price level?
Indeterminate
What does the unemployment rate measure?
The percentage of the labor force that is seeking work but not employed.
What type of market has extremely high barriers to entry and one seller?
Monopoly
Who controls monetary policy in the U.S.?
The Federal Reserve
What is the difference between nominal and real GDP?
Real GDP is adjusted for inflation. Nominal GDP is not.
What would happen to supply if cost of production decreases?
Supply would increase.
What kind of inflation is caused by increased production costs?
Cost-push inflation
What market structure has few firms and often involves strategic pricing?
Oligopoly
What type of policy is used to combat high unemployment?
Expansionary policy
What is the economic term for when prices rise across the country?
Inflation
What is the result when a price ceiling is is below equilibrium price?
A shortage.
What does CPI measure?
Changes in the price level of a market based basket of consumer goods.
What structure has many sellers offering similar but not identical products?
Monopolistic competition
What monetary tools involves changing the interest rate?
Open market operations
What is a tax that takes more percentage from low-income earners than from high-income earners?
A regressive tax
What is the economic term for how responsive quantity demanded is to a price change?
Price elasticity of demand.
What is the economic term for a period of falling GDP?
Recession
What is price discrimination, and what market structure uses it?
Charging different prices to different consumers; used in monopolies.
What does contractionary fiscal policy do to aggregate demand?
It decreases aggregate demand.