Term
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Definition
| various national currencies are exchanged |
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Definition
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Definition
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| What determines exchange rates? |
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Definition
· Relative income
· Changes in tastes
· Relative price level
· Relative interest rates
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Term
Trade Protections and Subsidies (Examples)
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Definition
· Taxes – Tariffs
· Import quotas
· Nontariff barriers (licensing)
· Export subsidies
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Term
World Trade Organization (153 nations)
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Definition
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Term
General agreement on tariff and trade (23 nations)
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Definition
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Term
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Definition
| Unemployment rate less than 5%, all resources are being used to the fullest potential. |
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Term
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Definition
· Labor
· Land
· Capital
· Entrepreneurial ability
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Term
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Definition
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Term
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Definition
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Term
Marginal Cost equals Marginal Benefit
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Definition
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Term
What causes economic growth?
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Definition
· new technology
· better education
· more resources
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Term
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Definition
| Another name for the command system. |
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Term
| Another name for the market system. |
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Definition
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Term
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Definition
· sell wherever and whenever one likes
· using or obtaining the economy
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Term
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Definition
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Term
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Definition
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Term
| Causes of economic growth: |
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Definition
• new technology
• better education
• more resources |
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Term
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Definition
• sell wherever and whenever one likes
• using or obtaining the economy |
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Term
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Definition
• buy or sell property
• workers can start/stop
• consumers can choose |
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Term
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Definition
| If the price increases, the demand will decrease |
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Term
| Changes in demand are caused by: |
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Definition
• Economic situation (income)
• Number of buyers
• Tastes
• Prices |
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Term
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Definition
| Price increases, the supply increases because the supply is making more of a profit and they want to produce more. |
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Term
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Definition
| The inability of a market to produce the right amount. |
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Term
| Negative spill over cost: |
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Definition
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Term
| Positive spill over cost: |
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Definition
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Term
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Definition
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Term
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Definition
| Marginal Product = change in total product (TP) / change in resources |
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Term
| Law of diminishing returns: |
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Definition
| Extra resources put in will finally result in MP declining. |
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Term
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Definition
Gross Domestic Product
• Excludes second hand sales and financial transactions |
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Term
| What is the formula for calculating GDP? |
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Definition
GDP= C+ Ig + G + Xn
• C = Personal Consumption
• Ig = Gross Investment
• G = Government Purchase
• Xn = Export - Import |
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Term
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Definition
| Unadjusted GDP, not compared to other years. |
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Term
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Definition
| Adjusted GDP, compared to another year. |
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Term
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Definition
The percentage of the labor force unemployed
• Frictional unemployment
• Structural unemployment
• Cyclical unemployment |
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Term
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Definition
| 4-5% unemployed (no cyclical) |
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Term
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Definition
| General price level is increasing |
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Term
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Definition
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Term
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Definition
• Unit of account
• Store value
• Medium of exchange |
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Term
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Definition
• Land
• Property
• Bonds
• Stock |
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Term
| The Government backs the value of the $. |
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Definition
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Term
| The value of money is determined by: |
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Definition
• Acceptability
• Legal tender
• Relative scarcity |
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Term
| What is the FED and what do they do? |
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Definition
Federal Reserve (The banks' bank)- Lend money to banks
- Supervises the banks
- Decides interest rates
- Controls money supply
- Issues currency
- Check collection
- Controls monetary policy |
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Term
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Definition
• Open market operations
• The reserve ratio
• The discount rate
• The auction facility |
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Term
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Definition
• Government spending
• Taxes
• Combination |
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