Basics
Concept that represents finite resources
What is Scarcity
Loss of economic efficiency when market doesn't reach its ideal equillibrium
Institutions where people who wish to save can supply their funds to those who wish to borrow for investment
What are Financial Markets?
Act that limited that number of immigrants into the United States, with the majority of immigrants afterwards being European.
What is the Johnson-Reed Act (Immigration Act of 1924)
The 12 regional banks of the Federal Reserve act as this when smaller banks cannot get funds elsewhere
What is the lender of last resort
The cost of the next best alternative
What is Opportunity Cost?
Comprised of two components, fixed and variable costs. Changes with amount produced.
What is Marginal Costs?
How often money is used in a transaction over a period.
What is the velocity of money?
Banks loaned to riskier clients, who otherwise would not have acquired a loan, right before the Great Recession.
What are subprime loans?
Monetary policy tool that increase money supply (money supply curve shifts to the right)
What is Expansionary Policy?
The father of Modern economics; created the Inquiry into the Nature and Causes of the Wealth of Nations
Who is Adam Smith
Oligopolies work together—acting as a monopoly— to benefit all involve to raise profits.
What is collusion?
Narrowest possible definition of the money supply. Only most liquid form of money, coins and paper money.
What is monetary base?
Borrowing money from a brokerage firm to purchase stocks, using your existing worth as collateral.
What is Margin Trading?
When the loan will be repaid and the interest rate in debt finance
What is date of maturity?
Combines economic analysis with value judgments; it describes what should be, not what is.
What is Normative Economics
Perfectly vertical line on a demand or supply curve
What is perfectly inelastic (E=0)?
Commission that found CPI overstated the rate of price inflation by 1.3% a year
What is the Boskin Commission?
Who are Fannie Mae and Freddie Mac?
Developers of the ancient and modern concept of GDP (two people)
Who are Sir William Petty and Simon Kuznets?
What is Pareto Efficiency?
Private parties can resolve externalities through bargaining, reaching an optimal outcome.
What is Coase Theorem?
For every 1% the unemployment rate differs from the natural rate of unemployment, the output gap deviates by 2%
What is Okun's law?
Major communication company that opened in 1925 and established Research and Development Wings
Intangible skills and experience acquired through education, training, and on-the-job experience
What is Human Capital?