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Details Title: 2105 macroeconomics Description: macroeconomics Total Flash Cards: 35 Created: 09/11/2006 08:51:42	To study from this set of flash cards, or to create your own your own study flash cards, register HERE. If you are already a registered user, CLICK HERE.
Cards Term Scarcity Definition The limited nature of society’s resources Term Economics Definition The study of how society manages its scarce resources Term Efficiency Definition The property of society getting the most it can from its scarce resources Term Equity Definition The property of distributing economic prosperity fairly among the members of society Term Opportunity cost Definition Whatever must be given up to obtain some item Term Rational people Definition People who systematically and purposefully do the best they can to achieve their objectives Term Marginal changes Definition Small incremental adjustments to a plan of action Term Incentive Definition Something that induces a person to act Term Market economy Definition An economy that allocates resources through the decentralized decisions of many firms and households as they interact in markets for goods and services Term Property rights Definition The ability of an individual to own and exercise control over scarce resources Term Market failure Definition A situation in which a market left on its own fails to allocate resources efficiently Term Externality Definition The impact of one person’s actions on the well being of a bystander Term Market power Definition The ability of a single economic actor (or small group of actors) to have a substantial influence on market prices Term Productivity Definition The quantity of goods and services produced from each hour of a worker’s time Term Inflation Definition An increase in the overall level of prices in the economy Term Business cycle Definition Fluctuations in economic activity such as employment and production Term Circular flow diagram Definition A visual model of the economy that shows how dollars flow through markets among households and firms Term Production possibilities frontier Definition A graph that shows the combinations of output that the economy can possibly produce given the available factors of production and the available production technology Term Microeconomics Definition The study of how households and firms make decisions and how they interact in markets Term Macroeconomics Definition The study of economy wide phenomenon, including inflation, unemployment, and economic growth Term Positive statements Definition Claims that attempt to describe the world as it is Term Normative statements Definition Claims that attempt to prescribe how the world should be Term Absolute advantage Definition The ability to produce a good using fewer inputs than another producer Term Opportunity cost Definition Whatever must be given up to obtain some item? Term Comparative advantage Definition The ability to produce a good at a lower opportunity cost than another producer Term Imports Definition Goods produced abroad and sold domestically Term Exports Definition Goods produced domestically and sold abroad Term Gross domestic product (GDP Definition Gross domestic product (GDP The market value of all final goods and services produced within a country in a given period of time Term Consumption Definition Spending by households on goods and services, with the exception of purchases of new housing Term Investment Definition Spending on capital equipment, inventories and structures, including house hold purchases of new housing Term Government purchases Definition Spending on goods and services by local, state, and federal governments Term Net exports Definition Spending on domestically produced goods by foreigners (exports) minus spending on foreign foods by domestic residents (imports) Term Nominal GDP Definition The production of goods and service4s valued at current prices Term Real GDP Definition The production of goods and services valued at constant prices Term GDP deflator Definition A measure of the price level calculated as the ratio of nominal GDP to real GDP times 100