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32 Cards in this Set

  • Front
  • Back
Ceteris Paribus
All things being equal
All things being constant
Macro Economics Def:
Concerned with Eco as a whole or with basics subdivision or aggregate. (ex: unemployement, deficet)
Micro Economics Def:
Is concerned with specifics eco units and with detail consideration of these units
Deals with what ought to be
Positive economics
deals with what is
2 Economic Fallacies
- Fallacy of composition
- Post hoc fallacy
4 Factors of production AKA RESOURCES
Land- (factor= rent)
Capital- (factor= interest)
Labor- (factor= wages)
Entreprenuership- (factor= profits...Rarest of all)
Production possibility curve
the increasing production of one good reduces production of the other good
(spending or keeping money)
Opportunity Costs
Measures what is giving up to produce or consume another good.
Economic profits AKA PURE PROFITS
Any profits that are increased normal profits
Mixed economy
is an economy that has a mix of economic systems
(ex:private-owned and state-owned enterprises)
a type of trade in which goods or services are exchanged for other goods and/or services.
Circular flow on income model
shows the relationship between money income and spending for the economy as a whole
Market Def:
A facility that brings buyer and seller together
Quantity Demand:
Change in price along the same demand curve
2 Kinds of Inflation
Inflation Demand Side

Inflation Supply Side
Inflation demand side is AKA
(too much $ chasing too few goods)
Inflation supply side
(wage push, profit push, supply side shock)
3 Kinds of unemployement
cyclical (bad one)
Bussiness Cycle
The Peak
The Recession
The Trough
The Recovery
The Recession
Is 2 or more negative quartes of GDP growth.
Consumer Sovereingnty
Consumers are responsible for how succesful the bussines is going.
Okun's Law
Measures economic causes of unemployement. (for every 1% point the actual unemployement rate is above the natural rate creates the 5% GDP GAP)
They are also known as SPILLOVERS
Public Goods
consumption of the good by one individual does not reduce the amount of the good available for consumption by others; and no one can be effectively excluded from using that good
Free Rider Goods
are people who consume more than their fair share of a resource
GDP Def:
The market value of goods and services produced by labor and property in the US
Total GDP
Final goods & Services
"YEAR" the year the good's were made in.
Disposable Personal Income
Personal Income
- Personal Taxes
Value Added
* another way of measuring GDP
* Looks @ its good stage of production
2 methods of GDP is:
Value Added & Final Sales
Real GDP
Takes into account inflation(or price changes) that occur in an economy.
3 Price of related goods
- complements
- substitutes
- independant goods