Supply and Demand
The term for consumers' willingness and ability to purchase a certain product.
What is demand?
The acronym GDP stands for this term.
What is Gross Domestic Product?
A maximum price designed to prevent sellers from price gouging, but potentially producing a shortage.
What is a price ceiling?
Increasing spending without raising new taxes adds to this national problem.
What is the national debt?
When Potato Growing Nation and Meatpacking Nation engage in free trade, this nation gets to experience a higher consumption of both meat and potatoes than they would have without trade.
What are both nations?
The term for natural price and quantity, where supply and demand curves meet.
What is market equilibrium?
If the stock market loses millions of dollars in value, then there is a period of massive unemployment, we can assume we are in this stage of the business cycle.
What is a recession or contraction?
A price floor designed to prevent employers from exploiting workers too heavily.
What is a minimum wage?
Lower interest rates, Congressional deficit spending are associated with this fiscal and monetary policy.
What is expansionary?
The type of unemployment that may be caused by new trade relationships.
What is structural unemployment?
An increase in demand has this effect on market equilibrium price and quantity.
What is increased priced, increased quantity.
All investors want to sell their stocks at this exact moment in the business cycle.
What is the peak?
A method used by the government to raise revenue while disincentivizing the sale of products with a negative externality.
What is sales tax?
New money is created through this standard, day to day financial action.
What are loans from banks?
A nation has a comparative advantage in a certain product when producing that product comes with a lower _______ cost.
What is opportunity cost?
An increase in supply has this effect on market equilibrium price and quantity.
What is decreased price, increased quantity?
This term for market contraction refers to the recession's positive effects, reducing investment in businesses which are not sufficiently demanded by consumers.
What is "market correction?"
A method used to encourage a market outcome which comes with a positive externality. (This can also protect an industry from foreign competitors)
What is a subsidy?
Expansionary economic policies increase employment, but at the cost of this economic problem.
What is inflation?
What is a tariff?
What is inelastic?
A car assembled in Canada from parts manufactured in China, then sold in the USA would be part of this nation's GDP.
What is Canada?
This negative externality is so massive that it threatens all of modern civilization.
What is climate change?
If the Fed wants to contract the money supply through an open market operation, it takes this action.
What is selling bonds?
The USA can produce more airplanes and cars than the PRC can. The PRC has an opportunity cost of 10 cars to produce 1 airplane, but the USA has an opportunity cost of 3 cars to produce 1 airplane. The USA should specialize in manufacturing this product.
What are airplanes?