Macroeconomics Test One

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  1. What are the roles of the government?
    • 1) Defense/ Protect
    • 2) Enforce contracts
    • 3) Correct market failure
    • 4) Provide public goods
    • 5) Transfer income
  2. What are the three types of economics?
    • Communism
    • Socialism
    • Capitalism
  3. Communism
    • Government controls all resources
    • Makes all decisions
    • Shortages
  4. Socialism
    • Welfare state
    • Most resources= privately owned/ no gov. control
    • Key industries= gov. controlled/ owned
    • Extensive regulations
    • Most decisions made by private sector
  5. Capitalism
    • All decisions made by market
    • No regulations
    • No gov. buildings/ state parks
    • Business= do wht they wnt--all resources=privately owned
  6. Illustrate change in demand
    • Shift to the right= decrease
    • Shift to the left= increase
    • Image Upload
  7. Illustrate change in quantity demanded
    Occurs only when price changesImage Upload
  8. Illustrate change in Supply
    • To the left= decrease
    • To the right= increase
    • Caused by change in one of the determinants of supplyImage Upload
  9. Illustrate change in quantity supplied
    Caused by a change in priceImage Upload
  10. Determinants of Supply (six)
    • Production
    • Cost of resoruces
    • Prices of other comodities
    • Expectations
    • Number of sellers
    • Taxes and subsidies
  11. Determinants of Demand (five)
    • Tate and preference- popularity
    • Income- rises=dmnd 4 mst goods= up
    • Price of related goods-price of concerts rise=dmnd for movie tickets increase (substitute goods)--dmnd 4 complementary good rises= dmnd 4 other declines--hot dogs rise=hot dog buns decline
    • Number of Buyers- lnger life=medical services, retirement homes
    • Expectations about future- snow= shovels, generators, snow blowers
Card Set:
Macroeconomics Test One
2013-02-15 21:44:39

Chapters 1-3
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