Fundamentals of Econ
List the key economics resources (5)
What is capital (human and physical), entrepreneurship, land, labor
A table that shows what consumers are willing and able to purchase at prices; A table that shows what producers are willing and able to produce at given prices.
What is a demand and supply schedule
Helps to measure standard of living
What is GDP per capita
Tools for fiscal policy (2)
government spending and taxes
Contractionary Fiscal Policy - decrease spending, increase taxes
Expansionary Fiscal Policy- increase spending, decrease taxes
This means "all else equal" in Economics
What is ceteris paribus
The three basic economics questions
Who to produce for?
When to produce?
How to produce?
A change in demand due to price; this is a movement on the curve
What is a change in quantity demanded
3 things that are not included in the measurement of GDP
Varied answers-
1. Intermediate goods
2. House purchases
3. Stocks and Bonds purchases
4. Money transfers
Part of the Fed that buys or sells bonds
What is Open Market Operations
Shows peaks, troughs, expansions, and contractions
What is business cycle
Type of economy that is based off how things were always done-usually slow to grow
What is traditional economy?
These factors affect it:
availability of substitutes
luxury vs. necessity
proportion of income spent on the good
time
What is elasticity of demand
This person is no longer looking for a job because they are discouraged. They are not counted in
The labor force
Type of fiscal policy that happens because the economy is in a contractionary period
What is automatic stablizers
Happens to deficits during a recession
What is increasing
Inefficiency is shown
What is a point inside the PPF curve
When the government states that prices of a good cannot go below a certain price; causes a surplus
What is a price floor
Factors that may shift AD (3)
What is:
Changes in household wealth
Changes in confidence
Government policy
Goals of the Fed
What is maximum employment, stable prices, and moderate long-term interest rates
Pillars of economic growth (cause growth in productivity) (4)
What is sound governance, human capital, technological change, and physical capital
Happens because some resources are better allocated to produce a type of good than other resources
What is the Law of Increasing Opportunity Costs
If supply decreases, this would happen to the equilibrium price and quantity
What is Price would increase, quantity demanded would decrease
This person was laid off and is currently looking for a job.
What is unemployed?
Increases as deficits increase
What is national debt
Happens when a country's opportunity cost to produce a good is less than another country's
What is comparative advantage