ECON 200 Handout 1 Key Terms

Question 1

Economics

Answer 1

The study of how societies allocate their scarce resources

Question 2

Microeconomics

Answer 2

Understanding individual’s motivations and their resulting actions that impact a society’s allocation of resources

Question 3

Aggreggate

Answer 3

Sum total

Question 4

Macroeconomics

Answer 4

Views an entire economy as a single unit as well as traits of that economy

Question 5

Capital

Answer 5

Something productive

Question 6

Fiscal Policy

Answer 6

How governments influence the sizes of their country’s output

Question 7

Inflation

Answer 7

Rising prices across the economy as caused by an increase in the stock of circulating money

Question 8

Monetary Policy

Answer 8

A government’s actions affecting the amount of money circulating around its economy

Question 9

Recession

Answer 9

A poorly functioning economy

Question 10

Fallacy of Composition

Answer 10

The fact that it is wrong to assume that what is true for one member of a group is true for the entire group

Question 11

Social Welfare

Answer 11

Society’s well-being