Micro pt. 1
The law stating that as the price of a good increases, the quantity supplied also increases.
What is the law of supply?
When a country imposes a tax on imported goods to protect domestic producers.
What is a tariff?
The total value of all goods and services produced within a country's border in a given year.
What is Gross Domestic Product (GDP)?
The amount of money a bank is required to hold in reserve and cannot lend out.
When is the reserve requirement?
This economist is widely known for his theories on the "invisible hand" and the importance of free markets.
Who is Adam Smith?
When the price of a good is set above its equilibrium level, leading to excess supply.
What is a surplus?
A country should specialize in producing goods where it has the lowest opportunity cost
What is comparative advantage?
The central bank uses this tool to control the money supply and influence interest rates.
What is monetary policy?
This type of unemployment occurs when there is a downturn in the business cycle, leading to a decrease in demand for goods and services.
What is cyclical unemployment?
This global economic organization sets international trade rules and disputes between countries.
What is the World Trade Organization (WTO)?
A market with few large firms, each shares control over prices.
What is an oligopoly?
Price control that sets a minimum price for a good or service
What is a price floor?
The curve that shows the relationship between the price level and the quantity demanded.
What is the aggregate demand (AD) curve?
When the central bank buys or sells government securities to influence the money supply.
What is open market operations?
The current Chair of the Federal Reserve
Who is Jerome Powell?
The cost that does not change with the level of output produced.
What are fixed costs?
A pricing strategy where a firm changes different prices to different consumers based on their willingness to pay.
What is price discrimination?
The total market value of all final goods and services produced by the residents of a country, regardless of location.
What is Gross National Product (GNP)?
The most liquid form of money that can be used to make purchases.
What is M1?
Nobel laureate economist, known for his work on game theory and its application to economic behavior.
Who is John Nash?
The benefits of a market activity that affects a third party.
What is a positive externality?
A market characterized by a single buyer of labor and multiple sellers, often seen in some public sector jobs.
What is a monopsony?
This effect occurs when higher prices lead to lower consumer spending because of decreased purchasing power.
What is the wealth effect?
A type of inflation caused by an increase in the cost of production, such as wages or raw materials.
What is cost-push inflation?
This economist is famous for his work on the theory of comparative advantage, contributing to international trade theory.
Who is David Ricardo?