Econ Vocab test Flashcards
Economics
Economics is a social science that studies human
behavior as a relationship between ends and scarce
means which have alternative uses.
Positive statements
Statement of fact which can be tested and proved true or
false. China has a RGDP growth rate of 6.9% in 2017.
Normative statements
Statements which are based on value judgements and are
subjective.( India should have a more aggressive
population policy)
Scarcity
Limited in supply in relation to our unlimited wants.
Opportunity cost
Cost of the alternative forgone. The opportunity cost of
attending the party on Friday night was missing football
practice.
Production possibility curve
A production possibilities curve (PPC) shows the
maximum combinations of goods and services that can be
produced by an economy in a given time period, if all the
resources in the economy are being used fully and
efficiently and the state of technology is fixed.
Factors of production
The inputs used in the production of goods and services
such as land, labor, capital and entrepreurial ability
Land
All natural resources used to produce goods and services.
Water resources, Minerals, Marine animals, Air etc.
Labor
Any mental or physical effort used in production for which
income is received. An engineer/construction worker.
Capital
Man-made aid to production. Tractor, Hammer, Software
technology
Entrepreneur
A person who coordinates the land , labor and capital to
produce goods and services. Jack Ma
Economic systems
The economic system refers to the organized method by
which a country allocates its scarce resources towards the
production of goods and services in the economy. 3 main
systems…Capitalism, Socialism & mixed economy.
Capitalism
Capitalism is an economic system in which capital goods
are owned by private individuals or businesses. The
production of goods and services is based on supply and
demand in the market rather than through central planning
(as in planned economy or command economy). Canada
Socialism( planned economy/command economy)
Socialism is an economic and political system based on
the public ownership (also known as collective or common
ownership) of the means of production. The production of
goods and services is based on central planning rather
than supply and demand in the market as in an market
economy. Vietnam
Mixed economies
A mixed economic system is a system that combines
aspects of both capitalism and socialism. A mixed
economic system protects private property and allows a
level of economic freedom in the use of capital, but also
allows for governments to interfere in economic activities
in order to achieve social aims. All economies are mixed
economies.
Transitional economies
A transition economy or transitional economy is an
economy which is changing from a centrally planned
economy to a market economy. China
Economic growth
Increases in the real GDP over time.
Economic development
Economic development is the process by which a country
improves the economic, political, and social well-being of
its people.
Consumer goods
Goods and services bought and used by consumers,
rather than by manufacturers for producing other
goods.( cars, pizza)
Producer goods
Goods & services (such as tools and raw materials) used
to produce other goods & services.
Micro economics
Study of the economic behavior of individual units of an
economy (such as a person, household, firm, or industry)
Macro economics
Study of totals or aggregate economy. ( Inflation,
economic growth )
Circular flow of income
The circular flow of income is a model of the economy in which the major exchanges are represented as flows of money, goods and services, etc. between economic agents. The flows of money and goods exchanged in a closed circuit correspond in value, but run in the opposite direction.
Injections
Injections are variables in an economy that add to the circular flow of income, and include investment (I) government spending (G) and exports (X).
Leakages
In economics, leakage refers to capital or income that diverges from some kind of iterative system. … Within this depiction, leakages are the non-consumption uses of income, including saving, taxes, and imports.
Real GDP
The % yearly change in the real GDP of an economy
