Chapter 1: Economics (Definition, Branches, Goals, Tools, and Economic Thoughts) Flashcards
the study of proper allocation and efficient use of scarce resources to be able to satisfy the unlimited needs and wants of humans.
Economics
Oikos means?
Household
Nomos means?
to contribute
A Social science that is concerned with production, distribution and consumption of goods.
Economics
the system of trade and industry by which the wealth of a country is made and used.
Economy
Why do we allocate resources?
Because of the unlimited wants and needs of people over the limited resources.
something you need in order to survive
Needs
something you desire
Wants
Can be accomplished once society is able to provide the greatest amount of enjoyment with the limited resources available.
Economic efficiency
Income and Riches are distributed properly in a nation.
Economic Equity
the distribution of wealth and income according to a fair standard.
Equity
Citizens’ capability to have economic decisions. (Free Entrepreneurship and Commerce, Engage in collective bargaining and Individual Choice).
Economic Freedom
Greater Blank results from a broader range of options.
Economic Freedom
the ability to participate in collective bargaining
Economic Freedom
to achieve stability by avoiding or reducing volatility in output, employment, and prices.
Economic Stability
Maintaining economic stability avoids economic blank and blank.
uncertainty and disruptions
Having a stable income or other resources to support a level of living and on the foreseeable future.
Economic Security
Blank and blank are the primary targets of policymakers to have financial security.
Price stability and inflation
the ability of the nation to enhance the economy’s production of commodities and services.
Economic Growth
People are better off living standards and blank becomes less of a concern as society gains more things that can be used to meet more wants and needs as a result of economic expansion.
Scarcity
The economy is growing if?
it generates more goods this year than last year.
Why is economics a social science?
because it studies peoples lives and how they interact with others and society.
The biological, psychological, social and cultural components of human life are studied in this branch of science.
Anthropology
It is the study of politics
Political Science
the scientific study of biological organisms’ behavior with the focus on human behavior.
Psychology
It investigates society by looking on human groupings, institutions and social relationships.
Sociology
Trying to make sense of historical events by using our understanding of economic dynamics.
Psychology
It tries to describe human economic behavior and the broadest historical, geographical, and cultural sense possible.
Anthropology
the study of country to country relationships as well as the activities of other organizations
International Relations
It is a Systematic examination of the state and its administration. It is concerned with democracy and the interaction of people and policy.
Political Science
A branch of economics that focuses on the actions of individual agents includes households, Firms, Consumers.
Microeconomics
A branch of economics that examines the total economy on a national and international scale, modeling it with highly aggregated economic data and factors.
Macroeconomics
A branch of economics that focuses on the broader issues like Unemployment, Interest and Inflation rates, Import/Export, Gross Domestic Product
Macroeconomics
A branch of economics that examines economic growth and repeating economic cycles
Macroeconomics
A branch of economics that tries to explain why various things are valued differently, how people make financial decisions, and how people trade, coordinate, and collaborate with one another in the most efficient way
Microeconomics
A branch of economics that examines human behavior in order to understand how people react to price changes and why they demand what they do at a certain price level.
Microeconomics
Micro and Macroeconomics are blank. However, they used different ideas and models that contradict at times
Intextricably linked
A method of economics that describes and explains various economic phenomena in “What is” scenario
Positive Economics
A method of economics that focuses on the value of economic fairness focuses on “should be” or “ought to be” aspect
Normative Economics
A method of economics that examines real word economic occurrence from a moral and ethical standpoint
Normative Economics
A method of economics that is based on Economic reality
Positive Economics
A method of economics that focuses cause and effect relationships
Positive Economics
A method of economics that is also known as policy economics
Normative Economics
A method of economics that also known as descriptive or pure economics
Positive Economics
A method of economics that examines and discusses correlation between variables that is unintentional.
Positive Economics
A method of economics that is used to determine whether economic occurrences are beneficial or not.
Normative Economics
an empirical approach of information acquisition that has characterized the evolution of science. It entails meticulous observation and strict skepticism of what is observed.
Scientific Method
Data obtained through historical record and interviews of past performances in a way that is easily analyzed. It allows to answer pertinent questions
Data Gathering
Synthesize gathered Data. It is the study of economic systems. An investigation of a manufacturing process of an industry.
Economic Analysis
Reasoning to generate conclusion
Economic Conclusions
Reasoning from particular to general
Inductive
Reasoning from general to particular
Deductive
Examination of intellectuals that evolve into economics
Economic Thoughts
Father of Modern Economics
Adam Smith
The economic thought that defended freedom of market economy
Classical Thought
Adam Smith’s work focuses on the inquiry on the blank and Blank of blank
Nature
Causes
National Wealth
Adam Smith’s successors
David Ricardo and John Stuart Mill
The blank which differs from value derived from general equilibrium of supply and demand unified the views of classical economics.
Labor theory of value
Blank and blank brought about by the industrial revolution were observed by the classical economist.
Economics and Social transformation
a type of economics that has been selfish behavior by individual that leads to an outcome that benefits everyone in the society
Classical Economics
According to the Birmingham School, what theory is government intervention is required to alleviate unemployment and economic fluctuations?
Consumption Theory
Classical Economics Branches
General Equilibrium Theory
Quantity Theory of Money
Who proposed the General Equilibrium Theory?
Leon Walras
Who proposed the Quantity Theory of Money?
David Hume
A theory that explains how much each product is produced and how the price of each good is related to all other goods
General Equilibrium Theory
A theory that how much money an average individual would earn for an hour of work, price of product, and etc. (Focuses on the value of Money)
Quantity Theory of Money
An economic thought where its performance of real-world economics is measured against the performance of classical economics.
Neoclassical Model
assume an element of irrationality. Consumer’s willpower was flawed.
Neoclassical Economists
Irrationality of people as a cause of?
Intertemporal Decision Making
Father of Macroeconomics
John Maynard Keynes
the catalyst for the great depression
stock market crash
The blank was an impulsive loss of trust in the future, a mass panic impacting all stock market participants.
source of the great depression
Founder of Keynesian Economics
John Maynard Keynes
concerned with the supply of money or the total amount of money in circulation and how quickly it is rising or dropping.
Monetarism
• Most important determinant of the economy’s overall performance.
Money
People understand how the market works and use all available information in making economic decisions, according to Robert Lucas and Tomas Sargent’s rational expectation.
Classical economics in the 21st Century
