Term
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Definition
a visual model of teh economy that shows how dollars flow through markets among households and firms
firms produce goods and servies using inputs such as labor, land, and capital (buildings and machines). these inputs are called factors of production
households own the factors of production and consume all the goods and services firms produce |
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Term
| markets for goods and services |
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Definition
| househlds are buyers and firms are sellers. specifically, households buy the output of goods and services that firms produce |
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Term
| markets for factors of production |
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Definition
| households are sellers and firms are buyers. households provide the inputs that firms use to produce goods ad services |
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Term
| production possibilities frontier |
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Definition
| a graph that shows the combinations of output that the economy can possibly produce fiven the availlable factors of production and the available |
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Term
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Definition
| the study of how households and firms make decision and how they interact in markets |
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Term
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Definition
| the study of economywide phenomena, including inflation, unemployment, and economic group |
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Term
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Definition
| claims that attempt to describe teh world as it is |
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