Principles of Economics
The branch of economics that studies the behaviour of the whole economy, both national and international.
What is Macroeconomics
Once Economists understand a problem in a simplified way they are in a better position to understand the problem in a complex world.
What are the role of assumptions
Is an integral concept in economics as it describes the foundation of the transactions that build a economy.
What is the Circular Flow Diagram
This type of unemployment occurs when individuals spend time searching for a job.
What is Frictional Unemployment
An increase in the overall level of prices in the economy.
What is Inflation
Whatever must be given up to obtain some item.
What is Opportunity Cost
Economists are considered scientists but unlike a normal scientist they must pay close attention to what?
To close attention to the natural experiments offered by history.
What are the two components that make up the Circular Flow Diagram
What are households and Firms
There are two types of categories in the population that are not considered unemployed.
What are retired and disabled persons.
This type of inflation occurs when the price level is pushed up by increases in the costs of production.
What is Cost-Push Inflation
What is Rational People
They omit many details to allow us to see what is truly important.
What are Economic Models
Measures the maximum output of the goods using a fixed amount of input.
What is the Production Possibilities Curve
This type of unemployment occurs due to fluctuations in the business cycle.
What is Cyclical Unemployment.
What are two reasons why Demand Pull Inflation occurs?
A growing Economy, Expectation of inflation, Over Expansion of the money supply, Discretionary fiscal policy, strong branding, technological innovation.
Is considered the father of Western Economics
Who is Adam Smith
Governments can sometimes improve market outcomes by enforcing the rules and maintains the institutions that are key to a market economy.
What is Property rights.
When wages and prices do not move smoothly and immediately to keep supply equal to demand in the labor and goods market.
What is Sticky Prices
This type of unemployment is connected to the weather not the business cycle.
What is Seasonal Unemployment.
Is a set of tools that a nation's central bank has available to promote sustainable economic growth by controlling the overall supply of money that is available.
What is Monetary Policy
This theorist wrote "The general theory of employment, Interest and Money" in 1936.
Who is John Maynard Keynes
What are the three macroeconomic goals?
What is: Keep the economy growing over time, Limit Unemployment, Keep Prices Stable
What does it mean when the point in the Production Possibilities Curve is inside the curve.
Not all resources are being used efficiently.
This type of unemployment happens because workers are replaced by machines.
What is Technological Unemployment
Is a policy enacted to try to slow growth to a more manageable level and control inflation.
What is Contractionary Fiscal Policy