Card Set Information
human, physical, labor, land, entrepreneur
all things equal
and quantity demand.
Demand is a curve and demand is a line.
Robinson Crusoe. Had all his work done by Friday
Father of economics, What causes wealth? Wealth of nations, 1776
Can raising min wage hurt the poor?
replace labor with machines
decisions made by consumers and businesses
decisions made by government
Why does the demand
curve slope downward
income effect and substitution effect
Why does a supply curve upward
most efficient resources used first
What causes shortage?
Artificially low prices.
d, D, ad
my demand for tea, every ones demand for drinks, everyone demand for everything
Gross National Product
Gross Domestic Product
Economic growth is important because
it’s the only way everyone can have more of everything.
Economic growth really took off during the industrial revolution.
Unemployment that occurs with the normal workings of the economy, such as workers taking time to search for suitable jobs and firms taking time to search for qualified employees.
Unemployment that occurs when there is a mismatch of skills and jobs.
rate of interest
real + interest = Nominal.
barter, commodity, species, gold/silver, fiat, check, credit cards
is fiscal policy ?
The balance of government spending and revenues
are the goals of fiscal policy?
growth, higher wages and full employment.
controls fiscal policy
Congress and the president
is contractionary fiscal policy
up and government spending down
are the tools of contractionary fiscal policy
In order to lower GDP to lower inflation.
is expansionary fiscal policy
Taxes down and government spending up.
controls monetary policy
What are the 2 types of monetary policy and discuss the tools of each
Contractionary-sell bonds and raise interest from lending to banks. Expansionary- buy bonds and lower interest.
ratio of aggregate demand and increase from original AD
interest adjusted for inflation
nominal interest rate
minimual interest rate
federal reserve bank
controls money supply and sets interest rates
tools of federal reserve bank
control money supply and buy and sell bonds to raise and lower discount rates.
money is worth less
What is deflation
Money is worth more
What causes inflation
increase in money supply
What caused deflation
money is worth more.
How do banks make a profit
Borrowing money from depositors and lending it at a higher interest rate than they borrowed it for.
What is supply side economics
Pollicy used to encourage an and increase in output
3 tools of supply side economics
lower income taxes