Chapter 2 Flashcards
1
Q
Circular-Flow diragram
A
Visual model of the economy that shows how dollars flow through markets among households and firms
2
Q
Production Possibilities Frontier
A
A graph that shows the combinations of output that the economy can possibly produce given the available factors of production and the available production technology
3
Q
Microeconomics
A
Study of how households and firms make decisions and how they interact in markets
4
Q
Macroeconomics
A
The study of economy wide phenomena including inflation, unemployment and economic growth
5
Q
Positive economics
A
Describe the world as it is
6
Q
Normative economics
A
Prescribe how the world should be
7
Q
A
