Bhh
Inflation:for each scenario specifying whether each group is hurt(A)or helped (B) by inflation People living in a fixed income Me.Ziegler buys a new Porscheon a 5 year fixed interest rate from the dealer Grandmother that lives in a monthly social security check Employees without a COLA clause in their contract
A B A A
Deflation
A decline in general price level
Hyperinflation
A period of rapid inflation that leaves a country'smoney Virtually worthless
Utility
Ability of a good or service to be useful and give satisfaction
Collusion
Agreements, usually illegally among producers to fix prices
Advertising Techniques (pick 2)
Bandwagon - following the "in" crowd Doom saying- "If you don't..."
which of the follwing most accurately represents the components that can be added up to find GDP?
C+I+G+(X-M)
Scarcity
Conditions that arises because society dose not have enough resources to produce all the things people would like to have
The discount rate is increased
Decrase
The Government Raises Taxes
Decrease
GNP
Dollar amount of all final goods and services produced within a nation including those abroad
Externality
Economic side effect that affect a 3rd party
Binder paper (supply)
Elastic
Diapers (demand)
Elastic
Porsche(demand)
Elastic
Depreciation on machinery
Fixed
Interest paid on a loan
Fixed
Rent payment
Fixed
Demand curve
Graph that shows the quantity demanded at all possible prices at a given time
Stageflation
High inflation and high unemployment occurring simultaneously in an economy
The FED buys bonds from banks
Increase
The government increasing spending
Increase
The required reserve ratio is decreased
Increase
Diapers(demand)
Inelastic
Oranges(supply)
Inelastic
Wine(supply)
Inelastic
Demand schedule
Listing that shows the quantity demanded at all possible prices at a given time
Circular Flow 1. Name the 2 markets that exist in the circular flow 2. Name and describe 2 things that flow from households to business 3. Name and describe 2 things that flow from business to households 4. Name and describe 2 things that flow from the households to governments
Resource Market ● Product Market ● Resources - land, labor, capital, and entrepreneurship ● Revenue - buying goods and services Money income - wages, rents Provide Goods and Services ● Taxes ● Labor
Inflation
Rise in the general level of prices
Name and describe two of the Principles of Economics
Scarcity forces tradeoffs : reminds us that limited resources force people to make choices and face tradeoffs when they choose ● Costs versus Benefits : tells us that people choose something when the benefits of doing so are greater than the costs
Surplus
Situation where quantity supplied is greater then quantity demand at a given price
Peak
The highest point between the end of an ecomnic expansion and the start of a contraction in a business cycle
Consumer price index
Used to measure price changes for a market basket of frequently used consumer goods
Labor
Variable
which of the following will not cause the demand curve shift?
a change in production costs
lying outside of the production possibility frontier represents which of the folowing
an unattainable combination of two goods
which of the following is an example of marginal thinking
comparing the difference in benefits of two alternatives
monetary policy is controlled by
congress
when measuring the unemployment rate part-time workers who are actively searching for a full time job are:
considered employed
fiscal policy includes all of the following except
controlling the discount rate
which form of business organization rests on a legal charter and establishes the business as an entity separate from the owners Sole Proprietorship industry partnership corporation
corporation
whcih of the following is a fixed cost for a manufacturer of blue jeans denim. labor, depreciation("wear"and "tear" on machines), electricity for running sewing machines
depreciation("wear"and "tear" on machines)
during a reccssion the economy is most likely to benefit from
expansionary monetary policy
economics is the study of which of the following
how to satisfy human wants with limited resources
all of the following are determinants of supply except resource prices, income, costs of production technology
income
An Oligopoly
inolves substantial barriers to entry and market power
The US is best describe as being a command economy traditional economy market economy mixed economy
mixed economy
If supply increases and demand decrases, which of the following will occur with certainty as the market reaches its new equlilbrium
price will decrease
which of the following is most important in determining what gets produced in a market economy? centrally planning, efficiency, comparative advantage, profit motive
profit motive
fiscal policy is carried out by changing any of the following except
reserve requirments
the cost of a decision made in the past is a
sunk cost
which of the following constitutes expansionary monetary policy
the FED lowers the discount rates
the law of diminishing returns states that as
the amount of one input is increased and all other inputs are held fixed,the marginal product of varied input will eventually decrease
good Y is a substitute for good x if
the demand for y increases when the price of x increase
The law of supply indicates that as prices increase the quanitiy of supplied increase the quantity of supplied decrase surplus increase shortage increase
the quantity of supplied increase
Trough
the stage of the economy's business cycle that marks the end of a period of decline business activity and the transition to expansion
opportunity cost is
the value of the best alternative to what actaully takes place
Factors of Production
● Land ● Labor ● Capital ● Entrepreneurship
Name and describe 2 market structures and provide an example:
● Monopoly: single producer and seller and extreme barriers, ex. Local power company PG&E ● Oligopoly: Some companies control majority of market, some barriers to entry, lots of advertisement, ex. Soft soda industry ● Monopolistic Competition: many sellers, relatively free entry, ex. Jeans
Define Globalization
● The process by which people around the world, along with their economic activities, are becoming increasingly interconnected ● Pro: can help aid developing countries out of poverty by improving the economy ● Con: trade agreements have been written to serve the interests of wealthy countries