Chapter 2 - Thinking Like an Economist Flashcards
0
Q
production possibilities frontier
A
a graph that shows the combination of output that the economy can possibly produce given the available factors of production and the available production technology
1
Q
circular-flow diagram
A
a visual model of the economy that shows how dollars flow through markets among households and firms
2
Q
microeconomics
A
the study of how households and firms make decisions and how they interact in the markets
3
Q
macroeconomics
A
the study of economy wide phenomena, including inflation, unemployment, and economic growth
4
Q
positive statements
A
claims that attempt to describe the world as it is
5
Q
normative statements
A
claims that attempt to prescribe how the world should be
