Unit 1
What is the concept in economics that resources are limited?
Scarcity
La valeur marchande totale de tous les biens et services finaux produits dans un pays au cours d'une période donnée?
GDP
Who controls Fiscal Policy?
Congress
What is the equation for nominal interest rates?
Nominal Interest rates= real Interest rate+ Expected inflation rate
What is the Philip's curve used for?
To Illustrate the relationship between inflation and unemployment
What is the act of giving up one thing in exchange for another thing?
Tradeoff
What is GDP that is adjusted for Inflation, reflecting the true change in production volume called?
Real GDP
What is Expansionary Fiscal Policy?
A government strategy to stimulate economic growth by increasing government spending, lowering taxes, or a combination of both
What is the financial sector?
the part of the economy made up of companies and individuals that provide financial services
What is it called when the government spends more than it gets via taxes?
Deficit spending
What Graph shows the maximum combination of two goods that can be produced with a given set of resources and Technology?
Production Possibilities curve
What are the three types of unemployment?
Frictional, structural, and Cyclical.
What is contractionary Fiscal Policy?
A government economic strategy where the government actively reduces spending and/or increases taxes, aiming to slow down economic growth by decreasing the amount of money circulating in the economy
What is M1 Money supply?
the money supply that is composed of currency, demand deposits, other liquid deposits
Crowding out increases interests rates.
What is The Economic principle that describes a party's ability to produce a good or service more efficiently than its competitors?
Absolute advantage
How do you calculate inflation?
(Price index in current period-Price Index in pervious period) /price index in pervious period x 100
What Policy can Congress use to lower inflation?
Ccontractionary policy
What is m2 money supply?
the money supply that includes cash, bank deposits, and money market mutual fund deposits
What is the velocity of moeny?
a measurement of the rate at which consumers and businesses exchange money in an economy
What are the four factors of Production?
Land, Labor, Capital, Entrepreneurship
How do you calculate a country's Unemployment rate?
Unemployment rate=(Number of Unemployment/Labor force) X 100
If Congress was to raise taxes, what in what direction would the Demand line shift?
The Demand Line would shift left
Interest rates and bond prices are inversely related because when interest rates rise, newly issued bonds offer a higher yield, making existing bonds with lower fixed rates less attractive, thus causing their market price to fall; conversely, when interest rates fall, existing bonds with higher fixed rates become more attractive, driving their price up
Why did the Chicken cross the road?
To Maximize it's Utility