Term
| Macroeconomics vs. Microeconomics |
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Definition
These are the two major fields of economics.
Micro- Individual and firm behavior e.g. why less is more
Macro- Broad picture of the economy e.g. trade deficit |
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Term
| Normative vs. Positive economics |
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Definition
| Normative economics is based on opinions, while Positive economics is based on facts. |
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Term
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Definition
| Best forgone alternative choice. |
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Term
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Definition
| when humans want to exceed our abilities to produce the goods and services demanded. |
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Term
| Solving for the Equation of a Line |
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Definition
Y=a+mx
(Y=Dependent variable, A=Vertical interception, M=Slope, X=Independent variable)
The slope of a line = vertical change / horizontal change.
Page. 18 |
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Term
| Maximizers Vs. Satisficers |
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Definition
These are types of buyers;
Maximizers- seek most or all info about all consumer choices, too many choices bring us down.
Satificers- tend to be satisfied with good enough. |
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Term
| What do Economists Agree on? |
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Definition
1. economists don't believe in wage control.
2. Globalization is a good thing.
3. Fiscal policy has a place to play in the business cycle.
4. The united states should be eliminate agricultural sub cities.
5. Government should eliminate sports franchises.
6. The federal balance should be balanced.
7.We need to fix social security. |
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Term
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Definition
1.Full Employment
2.Sustainable budget
3.Economic growth
4.Low levels of inflation |
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Term
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Definition
| He is the Father of economics. |
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Term
| What are the Pitfalls of Capitalism |
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Definition
| Greed, informal society, trust |
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Term
| Solve for Opportunity Cost |
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Definition
Opportunity Cost = # of units Given up / # of units received
Page: 24 |
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Term
| Understand the Production possibilities Frontier (PPF-Curve) |
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Definition
This illustrates the maximum amount of output that a country can produce given its current amount of resources available.
Can Grow with growth or shrink with decrease. |
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Term
| Proper Roles of Government |
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Definition
6 Roles of the Government:
1.Protect citizens from foreign invasion
2.Protect citizens from one another with private property laws
3.Provide public goods like schools, roads, defense, and bridges
4.Promote competition with international trade and anti-monopoly laws
5.To create a stable and common money supply
6.Protect the public from financial crises by authorizing financial regulation on information and the banking sector |
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Term
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Definition
4 Types of Capitalism:
1.State Guided - Government has a significant role within the economy; some success.
2.Oligarchic - Bulk of power and wealth is held by a small group of people and families; worst kind.
3.Big Firm - Most significant economic activities are carried out by established giant enterprises; good growth but flattens out.
4.Entrepreneurial - Small innovative firms; good outcomes but difficult. |
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Term
| Determinants of Economic Growth |
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Definition
Economic Growth depends on the GDP (gross domestic product) and the equation for it is:
GDP=C+I+G+NX
(C=Household Consumption;I=Investment;G=Government Spending;NX=Net Exports(Exports-Imports)) |
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Term
| History, Characteristics, Benefits of Economic Growth |
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Definition
Benefits of growth include, reduction in poverty, longer lifespans, higher educational attainment, and raised immunization to disease.
The economy boomed after 1820 because humans moved from hunting and gathering to specialization. It grew exponentially since then.
The characteristics of growth is supposed to wave in an upward fashion with times of gain and loss. |
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Term
| Why Do People Oppose Growth? |
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Definition
| business cycle stability, Malthusian "limits of growth", Currency uncertainties, Global Income Inequality, Structural change. |
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Term
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Definition
| The book by Marc Levingston that talked about how the world economy got smaller due to the giant ports that they are building |
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Term
| What Determines Welfare/Happiness |
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Definition
| The people's standard of living determines their happiness. The Gini Coefficient measures the equality of income distribution in the country. |
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Term
| Jared Diamond and Why Societies Collapse |
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Definition
| environmental components, and in some cases also contributions of climate change, hostile neighbors, and trade partners. |
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Term
| Three Types of Firms and Their Characteristics |
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Definition
Three types of Firms:
1. Sole Proprietorship - This is when one person runs a business. You can work as your own boss and you can start up quickly and cheaply. You also have unlimited liability.
2.Partnership - Businesses that are operated by two or more people. You can start up quickly and greater financial resources are available thank sole proprietorship.
3.Corporation - A type of business that has its own legal identity. It is easier to raise money, and there is limited liability. They are complicated and expensive to form, and they are double taxed. |
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Term
| Four Industries and Their Characteristics |
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Definition
4 types of Industries:
1.Perfect competition - this is the most competitive type of industry with many different firms, the firm has no price control, market freedom. (Gas station)
2.Monopolistic competition - Several firms that produce similar products, firms have little price control. (products lasting 5-10 years)
3.Oligopoly - Small number of firms (3-10) products are often highly-differentiated, firms have significant control over prices. (breakfast cereals)
4.Monopoly - One firm that produces a good for which there are no substitutes. The firm sets the price, and nobody can enter the market. (public utilities) |
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Term
| How the Economy Works: Circular Flow of the Economy |
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Definition
The Circular flow diagram PG. 71
Explains how the the economy flows. |
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Term
| Federal and State Government spending and revenue sources. |
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Definition
| A lot of the Federal government spending goes towards Social security, Medicare and Medicade, and the Defense Department. A lot of the revenue comes from taxes out of income of the citizens. |
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Term
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Definition
Output equals income:
Say's law states that supply creates demand |
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Term
| Who was John Maynard Keynes |
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Definition
economist whose ideas have profoundly affected the theory and practice of modern macroeconomics, as well as the economic policies of governments.
He also had a lot to do with the modern business cycle and fiscal and monetary policies. |
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Term
| The Three main macroeconomic concerns |
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Definition
1. Growth
2.Inflation - sustained rise in the overall price level.
3.Unemployment |
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Term
Understand fiscal and monetary policy
... When to use each |
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Definition
Fiscal Policy - can be thought of as when the federal government changes taxes or the amount of spending to achieve a particular outcome.
Monetary policy - Occurs when the U.S. Federal Reserve Bank changes the money supply and interest rates in the economy. |
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Term
| GDP definition and equation |
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Definition
GDP=C+I+G+NX
GDP is the gross domestic product or the total value of all production produced within our borders for a given time period. |
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Term
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Definition
| 1% raise in unemployment = 2% loss in GDP growth. |
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Term
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Definition
| Unemployment rate + Inflation rate. |
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Term
| The Business Cycle and its impact on industry |
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Definition
| The business cycle has a peak, a trough, and a recovery phase. |
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Definition
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