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88 Cards in this Set
- Front
- Back
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positive economics
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only deals with facts
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economics definition
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satisfying unlimited wants with limited resources
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kettirus paribus
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other things held constant
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four factors of production
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land
labor capital entrepreneurship |
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opportunity cost
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best alternative you give up
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marginal
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extra amount
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measures opportunity cost
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production possibility curve
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father of modern economics
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adam smith
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invisible hand
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self interest
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laissez faire
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let it be
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father of communism
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karl marx
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based on markets and competition
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capitalism
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a market...
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brings together buyers and seller
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law of demand
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inverse relationship with price and quantity
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only thing that affects quantity demanded
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price
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slop of demand curve
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negative
left to right downward slope |
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increase in demand for good, demand curve
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shifts to right
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law of supply
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direct relationship between price and quantity
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slope of supply curve
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positive
upward left to right curve |
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point where supply and demand meet
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equilibrium
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maximum legal price
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price ceiling
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ceilings cause
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shortages
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ceiling example
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rent control
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minimum legal price
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price floor
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price floor example
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rent control
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price floors create
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surplus
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normal good
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as income increases, demand increases
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inferior good
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as income increases, demand decreases
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if the price of x increases, the demand for a substitute good...
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increases
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if the price of a complement good x increases...
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quantity demanded of good y decreases
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consumers responsiveness to price change
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elasticity
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elastic demand for good, small price change, quantity demanded...
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big change
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example of perfectly inelastic good
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insulin
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determinant of elasticity
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percent of income
necessity v luxury substitute ability |
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big percent of income...elasticity is...
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more elastic
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three economic questions
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what is to be produced
how much is to be produced for whom is it to be produced |
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only one seller of a good
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monopoly
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large number of sellers selling identical or standardized product
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perfect/pure competition
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few large sellers
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oligopoly
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strike
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refusal to work
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biggest weakness of sole proprietorship
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unlimited liability
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stock
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share of ownership
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union
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group of people in workplace
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money is
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what money does
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liquid
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convertible to cash
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specie
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gold or silver coin
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Gresham's law
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bad money drives good money out of circulation
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price of using money
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interest
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GDP
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dollar value of final goods and services in one country within one year
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calculate GDP
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C+I+G+f=y
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the best way to measure growth in country is ....
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GDP per capita
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ups and downs of real GDP
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business cycle
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four stages of business cycle
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recession
trough expansion peak |
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president during beginning of Great Depression
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Hoover
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president elected in 1932
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FDR
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FDR's economic plan
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New Deal
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caused Great Depression
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Fedevils
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bill passed in 1930 which made great depression worse
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Smoot Hawley Tarriff
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inbetween jobs
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frictional unemployment
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lowest possible unemployment rate
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full employment
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looking for job but doesn't have a job
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unemployed
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unemployment rate
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percent of labor force out of work
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inflation rate of 1-3%
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creeping
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out of control inflation
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hyperinflation
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inflation
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too much money circulation, pushes prices up
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disinflation
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inflation rate decreasing
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principles of taxation
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benefit and ability to pay
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progressive tax
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income increases, rate increases
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regressive tax
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income increases, rate decreases
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FICA tax rate
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7.65%
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national sales tax to replace all other taxes
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Fair Tax
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taxing and spending by government to achieve full employment
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fiscal policy
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who is in charge of fiscal policy
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president and congress
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what is being expanding during expansionary policy during a recession
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GDP
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who is in charge of monetary policy
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Feds
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most common tool used by the feds to control the money supply
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open market operations
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spending more than you make in one year
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defecit
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current federal debt
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17 trillion
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Laffer Curve
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tax rate and revenue
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extranality
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side effect
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government securities
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bonds
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elasticity
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greater than one-- elastic
less than one--inelastic (necessities) |
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substitute
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determinant of elasticity
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opportunity cost
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time or money
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Fiscal and monetary policy
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F- GDP and taxing
M- Fed and 3 tools |
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more technology...supply curve
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shifts to the right
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velocity
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how fast money is being spent
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discount rate and prime rate
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d-interest rate Feds charge to commercial banks
p-rate that commercial banks charge best customers |
