Details Title: Brief Principles of Macroeconomics Description: Vocabulary chapters 1-5 Total Flash Cards: 30 Created: 09/30/2009 15:51:10		New Users: To study from this flashcard set, or to create your own your own study flash cards, REGISTER HERE. Existing Users: CLICK HERE. Additional Economics Flashcards
Cards in this set: Term Absolute Advantage Definition one person can produce more foods with the same amount of resources than another. OR. The ability to produce a good using fewer inputs than another producer. 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 though markets among households and firms. Term Comparative Advantage Definition a person can perform the activity at a lower opportunity cost. OR. The ability to produce a good at a lower opportunity cost than another producer. Term Comparative Advantage Definition a person can perform the activity at a lower opportunity cost. OR. The ability to produce a good at a lower opportunity cost than another producer. Term Competitive Market Definition a market in which there are many buyers and many sellers so that each has a negligible impact on the market price. Term Complements Definition two goods for which an increase in the price of one leads to a decrease in the demand for the other. Term Consumption (C) Definition Spending by households on goods and services, with the exception of purchases of new housing. Term Demand Curve Definition a graph of the relationship between the price of a good and the quantity demanded. Term Demand Schedule Definition a table that shows the relationship between the price of a good and the quantity demanded. Term Demand schedule Definition a table that shows the relationship between the price of a good and the quantity demanded. 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 Equality Definition the property of distributing economic prosperity uniformly among the members of society. Term Equilibrium Price Definition the price that balances quantity supplied and quantity demanded. Term Equilibrium Quantity Definition the quantity supplied and the quantity demanded at the equilibrium price. Term Equilibrium Definition a situation in which the market place has reached the level at which quantity supplied equals quantity demanded. Term Exports Definition goods produced domestically and sold abroad. Term Externality Definition the impact of one person's actions on the wellbeing of a bystander. Term GDP Deflator Definition a measure of the price level calculated as the ratio of nominal GDP to REal GDP times 100. Term Government Purchases (G) Definition spending on goods and services by local, state, and federal governments. Term Government Purchases (G) Definition spending on goods and services by local, state, and federal governments. Term Gross Domestic Product (GDP) Definition the market value of all final goods and services produced within a country in a given period of time. Term Gross Domestic Product (GDP) Definition the market value of all final goods and services produced within a country in a given period of time. Term Imports (IM) Definition goods produced abroad and sold domestically. Term Incentive Definition something that induces a person to act. Term Inferior good Definition a good for which, other things equal, an increase in income leads to a decrease in demand. Term Investment (I) Definition spending on capital equipment, inventories, and structures, including household purchases of new housing. Term Law of Demand Definition ceteris paribus. As price increases, quantity demanded decreases and as price decreases, quantity demanded increases. OR. The claim that, other things equal, the quantity demanded of a good falls when the price of the good rises. Term Law Of Supply and Demand Definition the claim that the price of any good adjusts to bring the quantity supplied and the quantity demanded for the good into balance.