Term
| Three central problems of the economy? |
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Definition
What to produce?
How to produce it?
For whom to produce it? |
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Term
| What is marginal benefit? |
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Definition
| Additional benefit above what you've already derived. |
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Term
| What is economic reasoning based off? |
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Definition
| The assumption that all actions and decisions have costs associated with them. |
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Term
| Cohn focuses on coordination rather than security as the central point of the definition of economics. Why? |
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Definition
| The quantity of goods and services depends on human action, and the ability to coordinate it. |
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Term
| If a country specializes, harnessing it's comparative advantage, the PPC's slope will: |
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Definition
| Be negative, but not constant. |
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Term
| What is the (law)(concept) of decreasing marginal returns? |
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Definition
| You've got to trade more and more of 'A' as you produce more of substitute 'B'. |
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Term
What point is most efficient on a PPC that's bowed out?
One that's bowed in?
What of points inside the curve? |
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Definition
If bowed out, produce at center
If bowed in, produce at EITHER end
If inside the curve, not producing at max efficiency. |
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Term
| What is the Law of Demand? |
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Definition
Quantity Demanded rises as price falls.
As long as there is a shift only in price, the point moves ALONG the demand curve. |
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Term
What is constant along a demand curve?
What is not constant? |
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Definition
Constant: price of good, substitutes, income of consumer, etc.
Not constant: PRICE of the good in question (look at the axes). |
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Term
| Get No. 15 on 'scan0006' explained |
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Definition
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Term
| Business cycles occur when: |
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Definition
| Output fluctuates around its secular trend. |
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Term
| What common buzzword is not a leading economic indicator? Why? |
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Definition
| Growth rate of the GDP. Does not account for GDP per capita; population may be rising faster than GDP. |
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Term
| What is the unemployment rate evaluated off of? |
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Definition
1. Size of the labor force
2. Number of people unemployed |
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Term
| An increase in the labor force results in what? |
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Definition
1. Increase in the labor force participation rate
2. Decrease in the employment rate |
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Term
| How do you calculate GDP? |
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Definition
| The market value of an economy's final goods and services in a one-year period. |
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Term
| What is included in GNP but not GDP? |
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Definition
| Sales of an American company to American citizens. |
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Term
| If you get a question asking for consumption, chances are the answer is___. |
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Definition
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Term
| Need to get No. 24 on 'scan0008' explained. |
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Definition
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Term
| What is the formula for Net Domestic Income? |
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Definition
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Term
| Need to figure out what induced expenditures are |
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Definition
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Term
| The expenditures function does what? |
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Definition
| Gives the relationship between induced expenditures and autonomous expenditures. |
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Term
| Need to learn real expenditures / real income (no. 29, 30, 32 'scan0010') |
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Definition
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Term
| Which industry is not affected directly by the monetary policy? |
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Definition
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Term
| What does an increase in the money supply result in? |
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Definition
| Decrease in the price level. |
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Term
What can the US Central Bank do (3)?
What can it not do? |
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Definition
Advise the gov't on finance
Loan money to corp's
Loan money to banks
NOT create money |
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Term
| What is unique about US money policy? |
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Definition
| We use MONETARY policy ONLY, not fiscal. |
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Term
| What is the legal limit to what a commercial bank can lend? |
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Definition
| Excess Reserves(25% of deposits) |
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Term
| Need to learn about Money Multiplier; best from homework (No. 40 'scan0012') |
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Definition
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