1. Change supply:
    human, physical, labor, land, entrepreneur
  2. Ceteris
    all things equal
  3. Demand
    and quantity demand.

    Demand is a curve and demand is a line.
  4. Opportunity
  5. Most
    organized man
  6. Robinson Crusoe. Had all his work done by Friday
  7. Father of economics, What causes wealth? Wealth of nations, 1776
    Adam Smith
  8. Can raising min wage hurt the poor?
    • Destroy jobs,
    • replace labor with machines
  9. Market
    decisions made by consumers and businesses
  10. Command
    decisions made by government
  11. Why does the demand
    curve slope downward
    income effect and substitution effect
  12. Why does a supply curve upward
    most efficient resources used first
  13. Causes
    • artificially
    • high price
  14. What causes shortage?
    Artificially low prices.
  15. d, D, ad
    my demand for tea, every ones demand for drinks, everyone demand for everything
  16. GND/GDP
    • Gross National Product
    • Gross Domestic Product
  17. 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.
  18. Full
    employment is
  19. Frictional
    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.
  20. Structural:
    Unemployment that occurs when there is a mismatch of skills and jobs.
  21. Seasonal
    Santa, baseball
  22. Real/Nominal
    rate of interest
    real + interest = Nominal.
  23. Types
    of money
    barter, commodity, species, gold/silver, fiat, check, credit cards
  24. What
    is fiscal policy ?
    The balance of government spending and revenues
  25. What
    are the goals of fiscal policy?
    • Economic
    • growth, higher wages and full employment.
  26. Who
    controls fiscal policy
    Congress and the president
  27. What
    is contractionary fiscal policy
    • Taxes
    • up and government spending down
  28. What
    are the tools of contractionary fiscal policy
    In order to lower GDP to lower inflation.
  29. What
    is expansionary fiscal policy
    Taxes down and government spending up.
  30. Who
    controls monetary policy
    • Federal
    • reserve
  31. 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.
  32. APC
  33. C/I
  34. APS
  35. MPC
  36. MPS
    ratio of aggregate demand and increase from original AD
  38. C
  39. I
  40. G
  41. S
  42. real interest
    interest adjusted for inflation
  43. nominal interest rate
    minimual interest rate
  44. federal reserve bank
    controls money supply and sets interest rates
  45. tools of federal reserve bank
    control money supply and buy and sell bonds to raise and lower discount rates.
  46. Inflation
    money is worth less
  47. What is deflation
    Money is worth more
  48. What causes inflation
    increase in money supply
  49. What caused deflation
    money is worth more.
  50. How do banks make a profit
    Borrowing money from depositors and lending it at a higher interest rate than they borrowed it for.
  51. What is supply side economics
    Pollicy used to encourage an and increase in output
  52. 3 tools of supply side economics
    • lower income taxes
    • lower spending
    • lower regulations
Card Set
Final exam