ch 1 Macroeconomics

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Author:
gabo
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104088
Filename:
ch 1 Macroeconomics
Updated:
2011-09-24 23:54:46
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Economic Way Thinking
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definitions
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  1. Scarcity
    The condition in which humans wants are forever greater than the available supply of time, goods, and resources.
  2. Resources
    • The basic categories of inputs used to produce goods and services. Resources are also called factors of production. Categories:
    • Land
    • Labor
    • Capital
  3. Land
    A shorthand expression for any natural resouce provided by nature
  4. Labor
    The mental and physical capacity of workers to produce goods and services.
  5. Entrepreneurship
    The creative ability of individuals to seek profits by taking risk and combining resorces to produce innovative products
  6. Capital
    The physical plants, machinary, and equipment used to produce other goods. Capital goods are human-made goods that do not directly satisfy human wants
  7. Economics
    The study on how society chooses to allocate its scarce resources to the production of goods and services in order to satisfy unlimited wants
  8. Macroeconomics
    The branch of economics that studies decision making for the economy as a whole.
  9. Microeconomics
    The branch of economics that studies decision making by a single individual, household, firm, industry, or level of goverment.
  10. Model
    A simplified description of reality used to understand and predict the relationship between variables.
  11. Ceteris Parubus
    A latin phrase that means while certain variables change, "all other things remain unchanged".
  12. Positive economics
    An analysis limited to statements that are verifiable
  13. Normative economics
    An analysis based on a value judgment.
  14. Direct Relationship
    A positive association between two variables. When one variable increases, the other variable increases, and when one variable decreases, the other variable decreases.
  15. Inverse Relationship
    A negative association between two variables. When one variable increases, the other decreases, and when one variable decreases, the other variable increases.
  16. Slope
    The ratio of the change in the variable on the vertical axis(the rise or fall) to the change in the variable on the horizontal axis(the run)
  17. Independent relationship
    A zero association between variables. When one variable changes, the other remains unchanged.

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