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| 10596553946 | Economics | The study of scarcity and choice | 0 | |
| 10596553947 | Individual Choice | the decision by an individual of what to do, which necessarily involves a decision of what not to do. Basic principles behind the individual choices: Resources are scarce. | 1 | |
| 10596553948 | Opportunity Cost | the cost of something is what you must give up to get it | 2 | |
| 10596553949 | Economy | A system for coordinating a society's productive and consumptive activities | 3 | |
| 10596553950 | Market economy | an economic system in which production and prices are determined by unrestricted competition between privately owned businesses. | 4 | |
| 10596553951 | Command economy | an economy in which production, investment, prices, and incomes are determined centrally by the government. | 5 | |
| 10596553952 | Production Possibility Curve | A graphical representation of the alternative combinations of the amounts of two goods or services that an economy can produce by transferring resources from one good or service to the other. This curve helps in determining what quantity of a non-essential good or a service an economy can afford to produce without jeopardizing the required production of an essential good or service. Also called transformation curve |  | 6 |
| 10596553953 | Resource | Anything that can be used to produce something else | 7 | |
| 10596553954 | Scarcity | The economic problem of A lack of resources which is unable to satisfy the various ways a society wants to use it. | 8 | |
| 10596553955 | Factors of Production | Resources of the Economy - Land, Labor, Capital, and Entrepreneurship | 9 | |
| 10596553956 | Inflation Rate | the rate at which prices increase over time, resulting in a fall in the purchasing value of money | 10 | |
| 10596553959 | Working class | The low middle to the low class of society who does a lot of the work | 11 | |
| 10596553960 | Marginal benefit | an additional satisfaction or utility that a person receives from consuming an additional unit of a good or service. A person's ________ is the maximum amount he is willing to pay to consume that additional unit of a good or service. | 12 | |
| 10596553961 | Marginal analysis | an examination of the additional benefits of an activity compared to the additional costs incurred by that same activity. | 13 | |
| 10596553962 | Recession | a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters. | 14 | |
| 10596553963 | Economic aggregates | all parties involved in the economy | 15 | |
| 10596553964 | Positive economics | Economic questions that can be objectively answered and tested by data. | 16 | |
| 10596553965 | Normative economics | Economic questions that cannot be objectively answered; more subjective. | 17 | |
| 10596566610 | Simple Circular Flow Diagram | Represents the transactions of physical things such as goods, services, labor etc. And flows of money that pay for these things. | 18 | |
| 10596568025 | mixed economy | An economy in which private enterprise exists in combination with a considerable amount of government regulation and promotion. | 19 | |
| 10628583663 | Macroeconomics | a branch of economics dealing with the performance, structure, behavior, and decision-making of an economy as a whole | 20 | |
| 10628584577 | Microeconomics | the study of how households and firms make decisions and how they interact in markets | 21 | |
| 10657712265 | comparative advantage | refers to the ability of a party to produce a particular good or service at a lower opportunity cost than another Formulae: Input (time) = Choice/Alternative Output (quantity) = Alternative/choice | 22 | |
| 10657714958 | absolute advantage | The producer that requires a smaller quantity inputs to produce a good is said to have an absolute advantage in producing that good | 23 | |
| 10664388184 | Land | all natural resources used to produce goods and services | 24 | |
| 10664388641 | Entrepeneurship | effort used to coordinate the production and sale of goods and services | 25 | |
| 10664389879 | Capital | goods used to produce other goods and services | 26 | |
| 10664458094 | Labor | Human effort directed toward producing goods and services | 27 | |
| 10664394550 | Human Capital | the knowledge and skills acquired by labor | 28 | |
| 10664434592 | the law of increasing opportunity costs | the opportunity cost of producing goods increases as more of that good is produced | 29 | |
| 10664455866 | Underemployed resources | resources that are not used to their fullest potential | 30 | |
| 10672007740 | Law of demand | there is an inverse relationship between price and quantity demanded Price changes quantity demanded (move along the curve) 5 Shifters change demand/price (moves the entire curve) |  | 31 |
| 10672016974 | Substitution effect (reason for law of demand) | an increase in the price of a good motivate consumers to buy relatively cheaper substitutes goods and vice versa | 32 | |
| 10672033993 | Income effect (reason for law of demand) | Changes in price affect the purchasing power (quantity/dollar) of consumers' income If the price of milk drops, I will buy more milk because I can. If it increases, I will stop buying milk because the purchasing power has decreased. | 33 | |
| 10672153921 | Law of Diminishing Marginal Utility (reason for law of demand) | As you continue to consume a good, you will get less utility (satisfaction) from each unit you consume. The Law Of Demand has a negative slope because the price needs to be increased to keep the demand assuming this law is true. | 34 | |
| 10672190034 | 5 shifters of demand | 1. Tastes and Preferences (if a study says that pizza will extend your life, demand will increase and vice versa) 2. Income (If it is a normal good, increase in income = demand increase and vice versa for inferior good) 3. Members Of Society (if there are more consumers, more people will exist and more will buy milk) 4. Future Expectations (if a consumer thinks the price will increase, they will buy more today and vice versa) 5. Price of Related Goods (see picture) (TIMER) This refers to a shift in quantity demanded at any given price |  | 35 |
| 10673160261 | Supply | the total amount of a specific good or service that is available to consumers. _______ can relate to the amount available at a specific price or the amount available across a range of prices if displayed on a graph. | 36 | |
| 10704480901 | Ceteris Paribus | a Latin phrase that means "all other things held constant" | 37 | |
| 10704793872 | Complements | Goods that are purchased together | 38 | |
| 10704803097 | Substitute Goods | Products or services that can be used in place of each other. When the price of one falls, the demand for the other product falls; conversely, when the price of one product rises, the demand for the other product rises. | 39 | |
| 10716154906 | Normal Good | Follows the law of demand | 40 | |
| 10716159469 | Inferior Good | a good that consumers demand less of when their incomes increase and vice versa | 41 | |
| 10716167664 | Giffen Good | necessities. price change doesn't affect demand. positive slope | 42 | |
| 10716179987 | Veblen Good | A luxury good whose demand increases as price increases | 43 | |
| 13783035909 | Sticky Wages | nominal wages that are slow to fall even in the face of high unemployment and slow to rise even in the face of labor shortages. When unemployment rises, the wages of those workers that remain employed tend to stay the same or grow at a slower rate than before rather than falling with the decrease in demand for labor | 44 | |
| 13783064041 | Recessionary Gap | when aggregate output is below potential output |  | 45 |
| 13783075969 | Inflationary Gap | when aggregate output is above potential output | 46 | |
| 13783080193 | Monetary Policy | managing the economy by altering the supply of money and interest rates | 47 | |
| 13783080194 | fiscal policy | A government policy for dealing with the budget (especially with taxation and borrowing) | 48 | |
| 13796555691 | Long Run Aggregate Supply | in long run, price level increases but GDP doesn't. This is where the economy operates at full employment |  | 49 |
| 13796560585 | Short Run Aggregate Supply | The relationship between the quantity of real GDP supplied and the price level when the money wage rate, the prices of other resources, and potential GDP remain constant. | 50 | |
| 13796564933 | Aggregate Demand | the amount of goods and services in the economy that will be purchased at all possible price levels | 51 | |
| 13796568427 | full employment | the level of employment reached when there is no cyclical unemployment | 52 | |
| 13796574539 | Supply and Demand Shock | These are changes in supply and demand | 53 | |
| 13796580393 | Stagflation | a period of slow economic growth and high unemployment (stagnation) while prices rise (inflation). This happens when AS shifts to the left. (Prices increase but quantity decreases) | 54 | |
| 13796583060 | Classical vs. Keynesian Economics | Classical - Adam Smith: Self regulates (overtime). Actual output (Y1) is less than the potential output (Ye). In that scenario, Gap closes due to an increase in AS. Unused resources are cheaper. In the opposite scenario where actual output is higher, resources become more scarce and it closes because resources are scarce. | 55 | |
| 13796590197 | MPC and MPS | marginal propensity to consumer, marginal propensity to save. | 56 | |
| 13796596640 | Consumption Function | Represents the relationship between disposable income and consumption (positive relationship 45 degree line) |  | 57 |
| 13796601825 | consumption function equation | Change in Consumption/Change in Disposable Income | 58 | |
| 13796617383 | Shifters of AD | C, I, G, Xn | 59 | |
| 13796619565 | Shifters of SRAS | 1. Changes in resource prices 2. Taxes 3. Environmental/Political Factors 4. Natural Disasters 5. Availability of Resources | 60 | |
| 13796623387 | Shifters of LRAS | 1. Availability of resources 2. Technology and Productivity 3. Policy Incentives (incentive policies) 4. Capital Resources | 61 | |
| 13796627870 | Wealth Effect | The tendency for people to increase their consumption spending when the value of their financial and real assets rises and to decrease their consumption spending when the value of those assets falls. | 62 | |
| 13796632241 | interest rate effect | Interest rates increase when price level increases and vice versa | 63 | |
| 13796637605 | net export effect | If the price of a country's good increases, exports will decrease. | 64 | |
| 13796645429 | Buying Bonds | increases money supply and decreases interest rates | 65 | |
| 13796647950 | Selling Bonds | decreases money supply, increases interest rates | 66 | |
| 13796650799 | open market operations | the purchase and sale of U.S. government bonds by the Fed | 67 | |
| 13796658282 | Discount Rate | The interest rate on the loans that the Fed makes to banks | 68 | |
| 13796658283 | Decrease in Discount Rate | increase the money supply | 69 | |
| 13796660670 | Federal Funds Rate (FFR) | the interest rate that banks charge one another to borrow money | 70 | |
| 13796666494 | Increase in the Federal Funds Rate | Decrease in Money supply, Increase in Interest Rates, Decrease in Real GDP | 71 | |
| 13796674099 | Reserve Requirements Ratio (RRR) | The minimum amount of money that Banks need to keep - usually in the form of a ratio. | 72 | |
| 13796678389 | Increase in Reserve Requirements | Decrease in Money Supply, Increase in Interest Rates, Decrease in Real GDP | 73 | |
| 13796681374 | Stocks | shares of ownership in a company | 74 | |
| 13796681375 | Bonds | Paper notes promising to repay money after a certain length of time with interest | 75 | |
| 13796690931 | Debt financing | funds raised through various forms of borrowing that must be repaid | 76 | |
| 13796690980 | Fiat Money | money without intrinsic value that is used as money because of government decree | 77 | |
| 13796696879 | Functions of Money | medium of exchange, unit of account, store of value | 78 | |
| 13796699205 | Present Value of Money | the amount of money you would need to deposit today in order to accumulate a specific amount in the future | 79 | |
| 13796701324 | Money Supply | the quantity of money available in the economy | 80 | |
| 13796708442 | M1 | currency, demand deposits, traveler's checks, and other checkable deposits | 81 | |
| 13796708443 | M2 | All of M1 + less immediate (liquid) forms of money to include savings, money market mutual funds, and small denomination time deposits. | 82 | |
| 13796714111 | M3 | The broadest component of the money supply. Equal to M2 plus large time deposits. | 83 | |
| 13796718428 | Liquidity | the ease with which an asset can be converted into the economy's medium of exchange | 84 | |
| 13796721391 | Transaction Demand | the amount of money held in order to make transactions | 85 | |
| 13796725934 | Asset Demand | The amount of money people want to hold as a store of value; this amount varies inversely with the interest rate. | 86 | |
| 13796732904 | Money demand | A relationship between the interest rate and the quantity of money that people are willing to hold at any given interest rate. | 87 | |
| 13796737409 | Theory of Liquidity Preference | Keynes's theory that the interest rate adjusts to bring money supply and money demand into balance | 88 | |
| 13796741653 | fractional reserve banking | a banking system that keeps only a fraction of funds on hand and lends out the remainder |  | 89 |
| 13796746982 | Reserve Requirement | the percentage of deposits that banking institutions must hold in reserve decided by the Fed | 90 | |
| 13796753388 | Excess Reserves | the amount of money that the bank keeps to lend out |  | 91 |
| 13796759674 | T-account | An accounting device used to analyze transactions |  | 92 |
| 13796768989 | Money Multiplier | the amount of money the banking system generates with each dollar of reserves |  | 93 |
| 13796774743 | Fiscal Expansionary Policy | 1. Reduce income tax 2. Lower corporate taxes 3. More government spending | 94 | |
| 13796774745 | Fiscal Contractionary Policy | 1. Raise personal income tax 2. Raise corporate taxes 3. Less government spending | 95 | |
| 13796778475 | monetary expansionary policy | 1. Buy bonds back 2. Lower discount rates 3. Lower the required reserved ratio | 96 | |
| 13796787206 | monetary contractionary policy | 1. Sell more bonds 2. Raise discount rates 3. Raise the required reserved ratio | 97 | |
| 13796790551 | Quantity Theory Of Money | a theory asserting that the quantity of money available determines the price level and that the growth rate in the quantity of money available determines the inflation rate |  | 98 |
| 13796795606 | Phillip's Curve | a curve that shows the short-run trade-off between inflation and unemployment |  | 99 |
| 13796800017 | Short-Run Phillips Curve (SRPC) | the negative short-run relationship between the unemployment rate and the inflation rate |  | 100 |
| 13796804584 | Long-Run Phillips Curve (LRPC) | shows the relationship between unemployment and inflation after expectations of inflation have had time to adjust to experience |  | 101 |
| 13796810706 | Loanable Funds | the flow of resources available to finance capital accumulation | 102 | |
| 13796810707 | loanable funds market | a hypothetical market that illustrates the market outcome of the demand for funds generated by borrowers and the supply of funds provided by lenders |  | 103 |
| 13855099789 | Causes of inflation | quantity theory, demand-pull theory, cost-push theory | 104 | |
| 13855099790 | demand-pull inflation | increases in the price level (inflation) resulting from an excess of demand over output at the existing price level, caused by an increase in aggregate demand | 105 | |
| 13855101629 | cost-push inflation | When prices rise due to an increase in the cost of production. | 106 | |
| 13855103675 | Quantity theory of money (cause of inflation) | The government prints too much money | 107 | |
| 13856961515 | Shifters of Money Supply | reserve requirement, discount rate, open market operations | 108 | |
| 13856980673 | Shifters of Money Demand | 1. Price Level 2. Income 3. Fiscal Policy | 109 | |
| 13857010548 | Balence Sheet | A financial statement that reports assets, liabilities, and owner's equity on a specific date. | 110 | |
| 13857014228 | Balance of Payments | a measure of the total flow of money into or out of a country | 111 | |
| 13857019862 | Current Account | Made up of three parts: trades in goods and services, investment income, and net transfers | 112 | |
| 13857043685 | investment income | income from the factors of production including payments made to foreign investors Example: Money earned by Japanese Car producers in the US | 113 | |
| 13857062922 | Net Transfers | money flows from the private or public sectors Ex Donations | 114 | |
| 13857086827 | Financial account | measures the purchase and sale of financial assets abroad | 115 | |
| 13857089946 | net capital outflow | the difference between the purchases of foreign assets by domestic residents (inflow) and the purchases of domestic assets by foreign residents (outflow) | 116 | |
| 13857097163 | Financial account Surplus | inflow is greater than outflow | 117 | |
| 13857100578 | Financial Account Deficit | Inflow is less than the outflow. | 118 | |
| 13857119748 | Relation between Financial And current account | If there is a surplus in the current account, the financial account must be in a deficit | 119 | |
| 13857124769 | Forex | The Foreign Exchange Market, where the majority of the world's currencies are bought and sold. | 120 | |
| 13857140529 | Appreciation of the U.S dollar will have the following impact: | Net Exports decrease | 121 | |
| 13857155842 | Depreciation of the U.S dollar will have the following impact: | Net exports increase, | 122 | |
| 13857162581 | FOREX graph What happens if Europeans go vacationing to the US? | When they convert their currency, the Euro Supply increases to compensate and depreciates while the opposite is said for the dollar |  | 123 |
| 13857236340 | FOREX shifters | 1. Changes in Tastes 2. Changes in Relative Incomes 3. Changes in Inflation 4. Changes in Relative Interest Rates (Higher interest rates increases inflow) | 124 | |
| 13857828771 | fixed exchange rate | The government activity manages the country's currency | 125 | |
| 13857838841 | Floating Exchange Rate | the market determines the value of the country's currency | 126 |
