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22 Cards in this Set
- Front
- Back
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Demand Curve (Cpt 3)
Law of Demand |
Always "inverse" SLOPING DOWNWARD
Price FALLS comsumers want more |
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Supply Curve
Law of Supply |
Always "positive" SLOPING UPWARD
As price of a good rises, all other factors being equal, producers will offer more of it. |
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Macroeconomics (Cpt2)
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Stimulus OR Stabilization
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GDP (cpt6)
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Gross Domestic Product
Market value of all goods and services produced in US Measured in $$$$$ |
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GDP (cpt 6)
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Increase (Recovery)
Decrease (Recession) |
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Comparative Advantage (cpt 5) pg.97
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Producing one goods IS realative CHEAPER in one nation than in another
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Comparative Advantage example
Ratio Oil Wheat Oil Wheat 3:1 CAN 2:1 US |
CAN US
Oil 30 40 Wheat 10 20 |
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Absolute Advantage
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Country can have in both products
Example US in Oil & Wheat But NEVER also the comparative advantage |
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Comparative Advantage US
Ratio 2 : 1 |
US gives up 2 tons of Oil Where Canada gives up 3 tons
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Comparative Advantage Canada
Ratio 3 : 1 |
Canada has better trade for 3 tons of oil to 1 ton of wheat
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NTR (cpt5)
Reciprocal Trade Agreements Acts of 1934 |
Normal Trade Relations (renamed)
Authorized President to cut tariffis by 50% (as long as other nations did the same) |
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Real GDP (cpt6)
Nominal GDP |
Constant $ = measured in constant $
Current $ = measured in current year $ |
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Price Index
Real GDP = Nominal GDP |
(Base Year Index)
---------------------- (Current Year Index) Note: Base is ALWAYS 100 |
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Measuring GDP : Expenditure approach (cpt7)
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GDP = C + I + G + (X-M)
GDP = Consumer spending + Investment + Government spending + (Export - Import) |
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Measuring GDP : Income approach (cpt7)
What people were paid, all thing that we earn |
NI (National Income)= wages + rent + interest + proprietors income + corporate profit + taxes
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From NI to GDP (cpt7) (1)
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NI does Not equal
Gross Domestic Product (GDP) |
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From GDP to disposable income
GDP - Depreciation = |
NDP Net Domestic Product
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From GDP to disposable income
NDP + NFFI + STAT DISC = |
NI (National INcome)
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PI (Personal Income) =
(cpt7) |
NI - taxes - payroll taxes - corporate income taxes - held corporate profits + transfer payment
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DI (disposable Income) =
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PI - personal taxes
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Real GDP =
(cpt7 pg138) |
Nominal GDP
--------------------------- Price index (in hundredths) |
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PI (Price Index) =
(cpt7 pg138) |
(Price in current year / Price in base year) * 100
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