the cost of the next best alternative you gave up when you made a choice
What is opportunity cost
100
Demand elasticity
What is a measure of how much the quantity demanded will change if another factor changes
100
GDP = C + I + G + (X - M)
What is the formula for GDP
100
Tools of The Fed
What are open market operations, the discount rate, and reserve requirements
100
GDP wil fall
What is the impact of investments falling due to increased pessimism about future business conditions on GDP
200
the world's first free-market capitalist, founder of laissez-faire economic policies
Who is
200
Demand inelasticity
What is the percentage change in quantity demanded is smaller than that in price
200
GDP=C+I+G+(X−M)
What is the formula for real GDP
200
Expansionary Fiscal Policy
What is an increase in government purchases of goods and services, a decrease in net taxes, or some combination of the two for the purpose of increasing aggregate demand and expanding real output
200
The SRAS curve shifts to the left
What is the impact in a rise of wages
300
The factors of production
What is land, labor, capital and entrepreneurship.
300
Diminishing marginal utility
What is a law of economics stating that as a person increases consumption of a product - while keeping consumption of other products constant - there is a decline in the marginal utility that person derives from consuming each additional unit of that product.
300
Per capita GDP
What is a measure of the total output of a country that takes the gross domestic product (GDP) and divides it by the number of people in the country
300
Contractionary Fiscal Policy
What are methods used to decrease aggregate demand or supply. Deliberate measures to decrease government expenditures, increase taxes, or both. Appropriate during periods of inflation.
300
An inflationary gap
What is it called in the economy if the current unemployment rate is less than the natural unemployment rate
400
Command Economics
What is an economy in which production, investment, prices, and incomes are determined centrally by a government.
400
A shortage
What is a situation where demand for a product or service exceeds the available supply
400
Unemployment rate
What is the measured percentage of employable people in a country's workforce who are over the age of 16 and who have either lost their jobs or have unsuccessfully sought jobs in the last month and are still actively seeking work.
400
A built in stabilizer
What is a mechanism that increases government's budget deficit (or reduces its surplus) during a recession and increases government's budget surplus (or reduces its deficit) during inflation without any action by policymakers
400
Bank reserves increase, interest rates fall
What is the impact When the Fed purchases government securities on the open market
500
Traditional economics
What is an original economic system in which traditions, customs, and beliefs shape the goods and the services the economy produces
500
A Surplus
What is something used to describe many excess assets including income, profits, capital and goods.
500
The natural rate of unemployment
What is the lowest rate of unemployment that an economy can sustain over the long run
500
GDP-consumption, investment, government purchases, and net exports
What are the main components of spending, which can cause changes in aggregate demand
500
The Federal Open Market Committee
What is the group that makes decisions about monetary policy