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28 Cards in this Set
- Front
- Back
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Scarcity |
A situation in which unlimited wants exceed the limit3d resources available to fulfill those wants. |
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Production possibilities Frontier (PPF) |
A curve showing the maximum attainable combinations of two products that may be produced with available resources and current technology. |
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Opprotunity cost |
The highest valued alternative that must be given up to engage in an activity. |
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Economic growth |
The ability of the economy to increase the production of goods and services |
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Absolute advantage |
The ability of an individual , a firm, or a country to produce more of a good or service that competitors, using the same amount of resources. |
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Comparative advantage |
The ability of an individual, a firm, or a country to produce a good or service at a lower opportunity coat than competitor's |
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Inflation rate |
The percentage increase in the price level from one year to the next. |
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Economic growth |
ThThursday ability of an economy to produce increasing quantities of goods and services |
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Recession |
The period of a business cycle during which total production and total employment are decreasing. |
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Expansion |
The period of a business cycle during 2hich total production and total employment are increasing |
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Business cycle |
Alternating periods of economic expansion and economic recession . |
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Gross domestic product (GDP) |
The market value of all final goods and services produced in a country during a period of time , typically one year. |
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Final good or service |
A good or service purchased by a final user . |
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Intermediate good or service |
A good or service that is an input into another good or service, such as a tire on a truck . |
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Transfer payments |
Payments by the government to households for which the government does not receive a new good or service in return. |
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Consumption |
Spending by house holds on goods and services, not including spending on new homes. |
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Investment |
Spending by firms on new factories, office buildings, machinery, and additions to inventories, plus spending by households and firms on new homes. |
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Government purchases |
Government purchases spending by federal, state, and local governments on goods and services |
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Net exports |
Exports minus imports. |
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Y=C+I+G+NX |
GDP= consumption + investment + government purchases + net exports. |
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Value added |
The market value a firm adds to a product. |
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Nominal GDP |
The value of final goods and services evaluated at current and year prices. |
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Real GDP |
The value of final goods and services evaluated at base year prices . |
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Price level |
A measure of the average prices of goods and services in the economy. |
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GDP deflator |
A measure of the price level , calculated by dividing nominal GDP by real GDP and multiplying by 100. |
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National income accounting |
Methods the BOA uses to track the total production and total income of the economy. |
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Gross national product (GNP) |
The value of final goods and services produced by residents of the US, even if the production take place our of the US. |
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Depreciation |
Value of worn out machinery, equipment, and buildings. |
