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48 Cards in this Set

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Able to produce more of a product than another country.
Absolute Advantage
Able to produce a product at a relatively lower opportunity cost than another country.
Comparative Advantage
Tracks inflation using retail prices.
Consumer Price Index
Spending more than is collected.
Deficit Spending
Broad social programs to provide minimum income & health levels.
Entitlements
Total amount borrowed to finance deficit spending.
Federal debt
Allows countries to specialize in products which they have a comparative advantage for.
Free Trade
Written by John Maynard Keynes.
General Theory
Describes short-run economics in 4 sectors.
General Theory
$ amount of all final goods & services produced within a country's borders in a year.
GDP
$ value of all final goods & services produced by U.S.-owned factors of production in a year.
GNP
A rise in the general level of prices.
Inflation
Statistical series taht measures changes in price over time.
Price Index
Tracks wholesale prices of 3000 commodities.
Producer Price Index
Limits the number of products that can be imported.
Quota
A tax on imports.
Tariff
Payments for which the govt. receives neither goods nor services in return.
Transfer payments
Measures the severity of job shortages.
Unemployment Rate
Scottish economist & philosopher who argued more goods = more wealth.
Adam Smith
Wrote "Wealth of Nations."
Adam Smith
Output needed to sell to cover total costs.
Break-even Point
Use of goods/services to impress others (fancy cars, expensive jewelry).
Conspicuous consumption
Intended for final use by the consumer.
Consumer goods
Formal agreement to fix prices or otherwise behave in an operative manner.
Collusion
Total production increases, marginal product decreases.
Diminishing Returns
Will last 3+ years under normal use.
Durable goods
Study of human efforts to satisfy unlimited wants & needs.
Economics
A few large sellers dominate the market & have ability to influence price in entire market.
Oligopoly
Putting $ to work to earn a profit.
Investment
Anything that can be exchanged for goods/services.
Medium of exhange
Market w/ one seller. (Very few exist)
Monopoly
When prices are stable and supply = demand.
Market Equilibrium
Pools investors' money to reduce risk.
Mutual fund
External COST to a 3rd party of an economic activity.
Negative Externalities
The cost of the next best alternative when another choice is made.
Opportunity cost
Minimum legal price.
Price Floor
Maximum legal price.
Price Ceiling
Foregoing present spending to have $ for future use.
Savings
When Q demanded > Q supplied.
Shortage
When Q demanded < Q supplied.
Surplus
Not having enough resources to produce all the things people want.
Scarcity
Can be used in place of another good.
Substitute Goods
Govt. payment to business/individuals to encourage a certain type of economic activity.
Subsidies
Alternatives (if you can't have everything you want, you must prioritize & make choices).
Trade-offs
The capacity to be useful to someone, it varies from person to person.
Utility
Cost that changes w/ level of production.
Variable cost
Accounts whose funds could be removed by simply writing a check w/o prior approval from the depository institution.
Demand Deposits (DDA)
Quarterly returns on stockholders in the form of a check.
Dividends