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25 Cards in this Set
- Front
- Back
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scarcity |
the state of being scarce or in short supply; shortage. |
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opportunity cost |
the loss of potential gain from other alternatives when one alternative is chosen. |
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What is the PPF and what does it have to do with scarcity |
Production Possibility Frontier. Producing on the PPF means all resources are fully utilized; this is called productive efficiency. |
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What are all the shift factors for supply and demand |
popularity, population, income, prices, and expectations |
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Allocative efficiency |
state of the economy in which production represents consumer preferences; in particular, every good or service is produced up to the point where the last unit provides a marginal benefit to consumers equal to the marginal cost of producing. |
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How is GDP related to unemployment rate |
to achieve a 1 percentage point decline in the unemployment rate in the course of a year, real GDP must grow approximately 2 percentage points faster than the rate of growth of potential GDP over that period. |
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What are the five components on the expenditure side of GDP |
Personal Consumption Expenditures ( C ) |
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inflation |
a general increase in prices and fall in the purchasing value of money. |
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unemployment rate |
a measure of the prevalence of unemployment and it is calculated as a percentage by dividing the number of unemployed individuals by all individuals currently in the labor force. |
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How is GDP related to unemployment |
a percentage increase in unemployment causes a 2% fall in GDP |
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What is the unemployment rate if there are 115,000,000 workers and 9,000,000 unemployed |
7.8% |
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What is the current unemployment rate |
4.8% |
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two types of inflation |
demand-pull and cost-push |
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aggregate demand |
the total demand for final goods and services in an economy at a given time |
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What are the four business cycle phases |
Peak, Trough, Recession, Expansion |
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Peak |
Real GDP reaches its maximum after rising during a recovery |
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Recession |
Real GDP declines, and unemployment rises |
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Trough |
Real GDP reaches its most minimum after falling during a recession |
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Expansion |
When the GDP starts to rise |
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Recession |
a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters. |
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name consequences of a recession |
fall in GDP / national output. A recession will typically be characterised by high unemployment, falling average incomes, increased inequality and higher government borrowing |
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What is Free Trade and Protectionism about |
one side sees free trade as way to bring prices down by opening markets. The other side points out workers are treated incorrectly and the environment is being harmed |
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What is GATT and what do they do? |
General Agreement on Tariffs and Trade from OCtober 30th 1947 to April 14th 1994 it was a multilateral agreement regulating international trade |
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What is WTO and what do they do |
World Trade Organization is an intergovernmental organization regulating international trade since January 1st 1995 |
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NAFTA |
North American Free Trade Agreement |
