macaroni macro
The ability to produce a particular good or service at a lower opportunity cost than prospective trading partners.
what is comparative advantage?
Moral hazards, externalities, and other imperfections in market economics relate to this.
What is a market failure?
This economist, who shares a name with one of the physics teachers here at TJ, was the founder of classical economics, and wrote the famous Wealth of Nations.
This term describes a consumer's satisfaction derived from consuming a good or service; it is also widely used to determine the value of a good or service.
What is utility?
This theory, coined by Adam Smith, was written in the "Wealth of Nations", delineating the hidden economic forces that underline the market.
What is the invisible hand/invisible hand theory?
This is the most commonly-accepted measure of wealth for nations, measuring the value of all goods produced within a certain time frame.
What is the gross domestic product?
Capital, entrepreneurship, labor, and land are all categories of this.
What are the factors of production?
This famous economist, also known as the founder of macroeconomics, suggested that the government should increase spending during economic downturns to stimulate demand and reduce unemployment.
Who is John Maynard Keynes?
This is the term for the rate at which the general price level of goods and services is rising and subsequently, purchasing power is falling.
What is inflation?
This equation shows the relation of nominal interest rates to real interest rates, relative to level of inflation.
What is Fisher's equation?
This market measures the relation of foreign currencies and their respective exchange rates.
What is the FOREX (Foreign Exchange) market?
Market system in which there are many firms selling similar, but not identical products. (hint:not monopoly)
What is monopolistic competition?
This Princeton graduate and economist was most notable for his contributions to game theory, awarded the Nobel Prize in 1994.
Who is John Nash?
This term is used to describe a period of persistent high inflation combined with high unemployment and stagnant demand.
What is a stagflation?
This 20th century model assumes that there are sticky wages and prices in the short-run but adjustments in the long-run and that supply and demand are the driving forces behind production, pricing, and consumption.
What is neoclassical economics?
This monetary policy action involves the purchase of securities (i.e. bonds) by central banks, such as the Federal Reserve, for the purpose of reducing interest rates and increasing the money supply.
What is quantitative easing? (ok: open market operations)
This "tragedy" emphasizes upon the deterioration of public goods due to high use.
What is the "Tragedy of the Commons"?
This economist is credited with being the founder of monetarism and, being a libertarian thinker, was a prominent advocate of free markets.
This popular fallacy leads people to engage in continued investment of an activity, even though costs outweigh the benefits.
What is the sunk cost fallacy? (sunk costs acceptable)
What is the Laffer's curve/ Laffer's tax theory?
This account in a country's balance of payments focuses on foreign-owned assets and capital transfers.
What is the financial and capital account?
This theorem claims that individuals can resolve market externalities without government intervention, often engaging in self-acted negotiation.
What is the Coase Theorem?
The author of bestselling book Thinking Fast and Thinking Slow, this economist and psychologist opened up the realm of behavioral economics, a field that focuses on the nature of human decision-making on economics.
Who is Daniel Kahneman?
The market system in which there is a predominant buyer. An example of this market system is the jobs market.
What is a monopsony?
This term, based on the Lorenz curve, is an indicator that is used to measure income/wealth inequality, in which zero indicates perfect equality and one indicating absolute inequality.
What is the Gini coefficient?