Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

SCHOOL > Economics pt.1 > Flashcards

Economics pt.1 Flashcards

1
Q

what is economics?

A

the study of how people make decisions given the scarce resources that are provided to them

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

what is scarcity?

A

limited amount of resources to meet unlimited wants at a zero price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

macroeconomics

A

the study of the economy as a whole on a nationwide scale (production, employment, prices)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

microeconomics

A

study of how consumers, workers and firms interact to generate outcomes in specific markets

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

resources

A

productive resources - have to be able to be used for something
-materials used to produce goods and services

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

resources - land

A

natural resources used to produce goods and services

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

resources - labour

A

any human service (physical or intellectual) - effort people devote to tasks which they are paid

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

resources - capital

A

machinery and equipment - any human made resource used to create other goods and services

  • factory machinery
  • factory itself
  • computers
  • furnishings
  • books & roads
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

you can add human capital (package of human services) through…

A
  • job training
  • experience
  • education
  • workshops
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

entrepreneur

A
  • ambitious leader who combines land, labour, and capital to create and market new goods and services.
  • someone who recognizes a profit opportunity, is able to organise the resources and is willing to accept risk
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

opportunity costs

A
  • the most desirable alternative given up as the result os a decision
  • what you give up to get it
    eg. giving up buying an orange for an apple
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

value has 2 parts…

A
  1. benefits

2. costs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

economic systems - traditional economy

A
  • based on culture and rituals, and is focused on the community as a whole
    eg. everyone benefits from everyones efforts - traditional inuit village in north america
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

economic systems - command economy

A
  • relies on the government to make all economic decisions
  • includes allocating, distributing and regulating prices/wages
    eg. north korea
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

economic systems - market economy

A
  • driven by consumers, whose decisions determine how the industries and financial markets will operate
  • individuals choose resources used, what goods to make, what service to provide.
  • no government envolvement
    eg. none//no pure examples
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

economic systems - mixed economies

A
  • utilises limited government involvement while also applying free market concepts
  • eg. most countries - usa
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

globalisation

A
  • process of international integration arising from the interchange of world views, products, ideas and other aspects of culture.
  • the removal of borders for the international expansion of markets
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

globalisation - economy

A
  • increasing interdependence of world economies as a result of the growing scale of cross-border trade of commodities and services, flow of international capital and wide and rapid spread of technologies.
  • companies search for new markets and opportunities for cheap production in countries with low wages and soft environment regulations
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

globalisation - politics

A
  • more interdependent on policy issues like climate change, gfc or terrorism
  • politics tries to react by attempying to make decisions in boarder groups of countries (european union, g20)
  • non governmental organisations (NGOs) are also able to assert influence and politics related to their field of work (lead to decrease of political latitude of single state governments for small states)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

globalisation - culture

A
  • transmission of ideas, meanings and values around the world in such a way as to extend and intensify social relations.
  • global distribution of foreign things eg. music, news, products
  • countering globalisation people are increasingly returning to local and regional cultural customs
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

business cycle

A
  • describes overall trends in GDP
  • shows economic swings from high economic growth to negative
  • economic growth is about expansion in national output (GDP)
22
Q

4 stages of business cycle

A
  • boom (peak)
  • recession (downturn-swing)
  • slump (trough)
  • recovery (upswing-upturn)
23
Q

business cycle - boom

A
  • demands for goods and services and level of production is high
  • consumer confidence to spend money is high
  • business invest and expand
24
Q

business cycle - recession

A
  • unemployment increases

- less spending by consumers (further job losses)

25
Q

business cycle - slump

A
  • also know as depression, many firms will go out of business
  • consumer demand is very low
  • unemployment very high
    eg. great depression (1930s) - us economy declines 14% in 1932
26
Q

business cycle - recovery

A
  • output(GDP) begins to rise
  • rising demands = firms hire more labour
  • increases consumer confidence = increases demand
27
Q

GDP

A

gross domestic product

- measures the total market value of all final goods and services produced in an economy in a given year

28
Q

real GDP

A

GDP adjusted for inflation and more accurately reflects the increase and decrease in output (production of goods and services)

  • level of final goods and services prices changes are removed from GDP data
  • economic growth is presented as a percentage increase or decrease from an earlier period.
29
Q

nominal GDP

A

total economic output of a country. This output is measured at current price levels and currency values, without factoring in inflation.
-unadjusted form

30
Q

GDP per capita

A

measure of the total output of a country that takes the gross domestic product (GDP) and divides it by the number of people in the country

31
Q

standard of living

A
  • the quality of life measured by the quantity of goods and services available for consumption
  • increase in real GDP per capita over time is interpreted as an increase in the standard of living
  • changes on real GDP per capita within the same country can be used to estimate the changes in the standard of living over time
32
Q

unemployment

A

when the labour force is seeking employment but cannot find it

  • unemployment rate of 2-3% are considered healthy economy
  • economists believe unemployment rate underestimates the level of employment in the economy (when discourages workers exist)
33
Q

number of unemployed persons…

A

includes people age 16years and older who are without a job but looking for work

34
Q

labour force

A

includes the total number of people who are working or unemployed

35
Q

people not included in the labour force..

A
  • fulltime college students
  • discourage workers (able to work but not looking)
  • retired citizens
  • homemakers
36
Q

labour force participation rate

A

percentage of the population that is in the labour force

37
Q

calculating labour force participation rate

A 
labour force(employed and unemployed)
 --------------------------------------------------------------   x100
                  adult population (15+)
38
Q

calculating unemployment rate

A
  • represents number of unemployed persons as a percentage of the labour force

number of unemployed persons
——————————————————– x100
labour force (employed&unemployed)

39
Q

job hoppers

A

those who are employed and looking for another job

40
Q

types of unemployment - frictional unemployment

A

unemployment due to the natural frictions of the economy

  • represented by qualified individuals with transferable skills who change jobs (tend to be very short terms)
    eg. short term contract workers, college student looking for work
41
Q

types of unemployment - structural unemployment

A

unemployment due to structural changes in the economy that eliminate some jobs and create others
eg. NAFTA (US) lost factory jobs but gained computer jobs (need to learn new skills)

42
Q

types of unemployment - seasonal unemployment

A

unemployment due to seasonal trends

eg. jobs related to seasonal activities (demand) & are periodic and predictable- ski instructor, fruit picking

43
Q

types of unemployment - cyclical unemployment

A

unemployment due to contractions/downturns in the economy/buusiness cycle
eg. great depression, global financial crisis, greece (unemployment 25%) // poor performance in the economy

44
Q

full employment

A

condition that exists when the unemployment rate is equal to the natural unemployment rate

45
Q

general policy makers have 3 economic goals…

3 measurements to analyse if the country is achieving each goal…

A
  1. keep economy growing over time
  2. limit unemployment
  3. ## keep prices stable-gdp
    -unemployment rate
    -inflation rate
46
Q

4 components that make up GDP

A
  1. consumer spending (consumption)
  2. business spending (investment)
  3. government spending
  4. net exports (exports/imports) - spending by other countries
47
Q

resources - enterprise

A

people who bring all the resources together for the purpose of production (also called entrepreneurship)

48
Q

flow of money

A
  • links main sectors within economy and is what makes it function
  • without money = bartering (exchanging goods for other goods) … result in fewer and weaker links between sectors and lower standard of living
49
Q

injections

A
  • investment, government expenditure and exports

- if injections greater than leakages, economy expands

50
Q

leakage

A
  • savings, taxation and imports

- leakages greater than injections, economy contracts

51
Q

circular flow of income

A

HOUSEHOLDS: consumers, owned economic resources (land, labour, capital and enterprise)
FIRMS: production, pays income to services

(households use income to buy goods and services - consumption)

SCHOOL (19 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions