Chapter 2: Thinking Like An Economist Flashcards
1
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
2
Q
Macroeconomics
A
The study of economy-wide phenomena, including inflation, unemployment, and economic growth
3
Q
Positive statements
A
Claims that attempt to describe the world as it is
4
Q
Normative statements
A
Claims that attempt to prescribe how the world should be
5
Q
Circular-flow diagram
A
A visual flow of the economy that shows how dollars flow through markets among households and firms
