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19 Cards in this Set

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What is economics?
the study of how society chooses to employ resources to produce various goods and services and to distribute them for consumption among various competing groups and individuals
what did Thomas Malthus believe?
late1700-1800 theorized pop would grow too fast; resources cant keep up;
what did Adam Smith believe? What is the concept of the invisible hand?
1776 businesspeople's greed to succeed helps economy by productoin of needed goods, services, and ideas
what is capitalism? what are the 4 basic rights in capitalism?
econ sys all means of production and dist are privately owned and operated for profit. 1 to own private property 2 to own a business &keep all profits after taxes 3 freedom of comp 4 freedom of choice
explain how supply and demand interact to establish an equilibrium price.
meet at a point where quantity supplied and demanded meet. sets price
perfect competition and monopolistic competition
pc - many companies with identical products no1 can dictate a price (fruit veg)
mc - many companies sell similar products but percieved different. candy computers hot dogs
oligopoly and monopoly
few sellers dominate. tobacco cars soda
one seller for a product. electricity microsoft
what are some benefits and limitations of free markets?
good - quality = $
bad - needed edge pay least possible;greed lack of ethics
what is socialism? benefits and drawbacks
pros - equal classes; spread wealth; healthcare edu; less incentive to start business or work hard
cons - highly taxed; hard to create wealth
what is communism?
gov't owns almost all businesses; dictates what is produced and by who;
cons - less freedoms relig
what is mixed economy?
combo or socialism and capitalism higher taxes but businesses are owned privatly
gross domestic product
total value of final goods and services produced in a country in a given year
the unemployment rate
16 y/o no job & tried to find job w/i most recent 4 weeks
consumer price indexes CPI
measures changes in the prices of about 400 goods and services; measures pace of inflation
productivity
total volume of goods and services one worker can produce in given period. increase due to machinery
business cycles
econ boom- businesses do well; recession - 2 or more quarters show declines in GDP, prices fall, businesses fail; depression is a severe recession; recovery occurs when the econ stabilizes and starts to grow
fiscal policy
gov't efforts to keep econ stable by increase or decrease taxes or gov't spending; good balance so govt prog and grow econ
national debt
sum of gov't deficits over time
monetary policy
management of money supply and interest rates; too high fed reserve bank puts more money into the economy and lowers interest rates