Chapter 2 Flashcards
1
Q
Why is the Us Econ the largest econ?
A
- Population u 320mil
- Working pop of 144mil - produce $116,000 of goods
- Rich population
- Combo of Pop + prod. efficeny
2
Q
What are the primary aspects of the production system?
A
- Inputs / Factors of production- Labor, Machinery, buildings a Natural resources to produce outputs.
- Outputs = Goods + services others want to acquire.
3
Q
Why do many Americans hold grave misconceptions about the US econ?
A
- Because we participate and observe our exp with the econ. E.g. Most goods come from China + Biz costs account for 1/3 of the price we pay at the store.
- Also, US Gov jobs have not grown Over the last decade. (These are misconceptions)
4
Q
Why do the “Working Pop,” not produce much?
A
- On average, in 2013 how much did the avg working American produce?
- $116,000 per worker
- $53,000 per person, workers & non-workers combined
5
Q
How does the econ system get described?
A
- Inputs (Resources) -> Factors of Production (FP) (Refinement & Production) -> Outputs (Goods & Services)
6
Q
Why is India’s econ growth a good reason to study econ?
A
- India’s econ sys is becoming more eff.
7
Q
Why is USE unique?
A
- High per capita income t pop size.
8
Q
What does a “Private-Enterprise Econ” mean in the US?
A
- “Land of opportunity” use of free markets use for VE.
- “Privatized” Industrial assets + other infrastructure are private
- “Marketized” A greater share of GDP flows thru markets, 20% of GDP is Gov, purchases from private enterprise.
9
Q
Gross Domestic Product (GDP)
A
- Measure of the size of the econ, the total amount of it produces in a year.
- Real GDP adjusts this measure (number) for changes in the purchasing power of money. ie, corrects for inflation.
10
Q
What makes an econ Open?
A
- Econ is open if Imports + Exports = large share of GDP
11
Q
An Econ is considered closed if…?
A
Close Economy
- If imports & exports = small share of GDP
12
Q
In 2013 how much of the USE was in ports?
A
- 16% w/ less than 1/5 from China
13
Q
Is USE open or closed?
A
- Most closed among adv. industrial nations. In 2013 14.9%
14
Q
- What is the main theme of this book?
A
- What does the market do well + what does the market do poorly?
15
Q
Why is the USE growing?
A
- Large pop size, Large GDP per capita, 4x higher in 2013 than 1960
- American’s purchasing power increased 9× in 20th century
16
Q
What does Recession mean?
A
- period of time (two quarters?) during which time the econ gets smaller
17
Q
What are the ups -downs of the econ called?
A
- Econ fluctuations or Biz cycle
