Term
| What are the 3 commonly asked economic questions? |
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Definition
* What to produce
* How to produce it
* For whom to produce it |
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Term
| What is Absolute Advantage? Comparative Advantage? |
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Definition
*AA-When a country should produce the product it can produce w/ its given resources in abundance as compared to a second (another) country.
*CA-When a country should produce the product it can produce w/ its given resources ata lower opportunity cost as compared to a second (another) country. |
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Term
| What is the Federal Funds Rate/ Market? |
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Definition
* Rate- Rate member banks charge when the borrow from each other.
* Market- market where member banks borrow from each other. |
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Term
Say's law states that...
Okun's law states that... |
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Definition
*Say's- Supply creates its own demand
*Okun's- a 1% decrease in the unemplyment rate beyond the natural (target) rate of unemployment will lead to a 2.5% decreas in output (GDP). |
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Term
What is the...
interest rate?
prime interest rate?
discount rate? |
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Definition
Interest- premim pay for use of money (rate charged by member banks to customers)
Primed in.rate- rate banks charge trustworthy customers.
Discount-rate that the Fed charges member banks when they borrow money from Fed. |
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Term
What are...
Export tariffs?
Import Tariffs?
and Non-Tariffs? |
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Definition
* Export- Fees charged on by exporting country
* Import- Fees charged on by importing country
*Non-tariff-use of other means but not fees
like:
a.Quotas-#, size, volume
b. Licenses- permit
c.Packaging- storage
d. VER- Voluntary Export Restraint-
Trading countries can voluntarily restrict the size of their trade. |
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Term
What is a demand Curve?
What is Equilibrium? |
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Definition
*DC- A various quantity that a consumer is able and willing to purchase at various prices.
Eq- Point where there is no tendency for price to change |
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Term
| What is a demand/ supply schedule? |
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Definition
DS- A mathematic tabulation- % Quantity supplied to a price
SS- Amount a consumer is able and willing to buy at a specific price at a specific time. |
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Term
| What is a Production possibilites curve/ frontier (PPF/PPC) ? |
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Definition
| All possible combinations of 2 goods/services that can be produced with a given technology and resources efficiently. |
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Term
Movement along the Demand / Supply is...
A shift in demand/ supply is... |
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Definition
* Moving from 1 point of line to another point of same line.
* Moving from 1 line to another. |
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Term
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Definition
| There is a command economy, but government officials are elected. |
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Term
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Definition
| Private ownership- " self" |
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Term
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Definition
| There is a command Economy, and Government officials are appointed. |
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Term
What is utility?
disutility?
What is the Fallacy of Composition? |
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Definition
U- the happiness one derives from a good
D- the unhappiness one derives from a bad
Fallacy of Composition-Erroneous belief that what is good for one is necessarily good for a society. |
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Term
| What is the classical range of the Aggegate Supply curve? What does it look like? |
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Definition
| * a range in which output does not change, but the price does. It is a vertical line. |
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Term
| What is the Keynesian range of the Aggegate Supply curve? What does it look like? |
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Definition
| * A range where price does not change, but output does. It is a horizontal line. |
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Term
| What is the intermediate range of the Aggegate Supply curve? What does it look like? |
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Definition
| *the range where both the price and output change.It is between the classical and Keynesian ranges. |
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Term
| What is the classical view of Economics? Keynesian view? the Keynesian equation? |
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Definition
C-No government intervention in Ecoomy (laissez-faire), long-run. automatic equilibrium
K- Government intervention, short run, not self- correcting.
K eq.- Y = (1/1-b) (multiplier) X (C+I+G+X-M) |
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Term
| What is the law of Demand? the law of supply? |
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Definition
D- Price increases, Quantity demanded decreases, vice versa.
S- Price increases, Quantity supplied increases. Price decreases, so does Quantity supplied. |
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Term
| What are Non- prohibitive and Prohibitive tariffs? (aka the 2 tariffs based on implemenataion?) |
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Definition
Non- a tariff that is low (reasonable) that trade may be permitted.
Pro- Tariff that is high (unreasonable)
that trade may not be permitted. |
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Term
| What is a traditional economy? |
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Definition
| Economy modeled after that of the lifestyle. |
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Term
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Definition
| - a " little bit of all economic systems" |
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Term
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Definition
| Increase in the value of the currency based on it exchange w/ other country |
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Term
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Definition
| Decrease in value of the currency based in its exchange w/ other country |
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Term
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Definition
| Increase in the value of currency based on government decree (statement) |
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Term
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Definition
| Decrease in the value of currency based on government decree (statement) |
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Term
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Definition
| When a currency is purchased/ sold @ a price below the markest equilibrium price. |
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Term
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Definition
| When a currency is purchased/ sold @ a price above the markest equilibrium price. |
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Term
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Definition
| An increase in size (population) but not finacial status. |
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Term
| What is Economic growth (development)? |
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Definition
| Increase in size and financial status of an improvement in standard of living. |
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Term
| How do you calculate Per Capita Income (PCI)? |
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Definition
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Term
| What are less developed countries? |
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Definition
| Countries that are non-industrialized with a low PCI,aka "third world countries" |
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Term
| What are developing countries? |
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Definition
| Countries moving towards industrialization- medium PCI |
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Term
| What are Developed countries? |
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Definition
| Industrialized countries- high PCI |
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Term
| What is the vicious cycle of poverty? |
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Definition
| Poor get poorer, Rich get richer. |
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Term
| What is the most favor nation? |
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Definition
| The country that reserves the right to negotiate and receive the least possible trade restrictions. |
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Term
| What is the most favor nation? |
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Definition
| The country that reserves the right to negotiate and receive the least possible trade restrictions. |
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