micro vs macro
How are prices determined in a free market economy?
a free price system based on investment production and distribution and supply and demand.
law of supply
as the price of goods and services increase the quantity of goods and services increase.
monetary policy
changing the rate of growth of the supply of money in circulaton. controls supply of money
money
form of exchange thats durable and accepted
gives out loans and has interest on them
how the FED creates money
aggregate supply
real domestic output of producers based on rise and fall of the price level
macroeconomics
study of the behavior of the economy as a whole and not just one specific topic.
microeconomics
study of the decisions people make regarding allocation of resources and price of goods and services.
fiscal policy
taxes and spending such as unemployment inflation rate economic growth and national debt
the federal reserve
the central bank of the USA regulates banking institutions.
inflation
the increase of price overtime
GDP
the monetary value of all the finished goods and services produced within a countries boarders
law of demand
the quantity of goods and services increase when price falls
C+I+G+X
to calculate GDP
CP1 year - CP2 year / CP1 year
to calculate inflation
aggregate demand
total of all planned expedentures in the entire economy
market equilibrium
when the supply in the market is equal to the demand
