Macro Econ Flashcards

Test 1

1
Q

To obtain more than one thing, society sacrifices the opportunity of getting the next big thing

A

Opportunity costs

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2
Q

The allocation of limited goods

A

Economics

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3
Q

Comparisons of marginal benefits and marginal costs, usually for decision making

A

Marginal analysis

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4
Q

Is concerned with making individual customers, workers, households, and business firms

A

Microeconomics

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5
Q

Examines the performance and behavior of the economy as a whole

A

Macroeconomics

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6
Q

A larger total output

A

Economic growth

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7
Q

A particular set of institutional arrangements and a coordination mechanism- to respond to the economizing problem

A

Economic system

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8
Q

Economic systems differ as to

A

Economic systems differ as to
1. Who owns the factors of production
2. The method used to motivate, coordinate, and direct economic activity

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9
Q

Also known as the capitalist or the mixed economy

A

Market system

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10
Q

Is characterized by the mixture of centralized government economy is incentives and decentralized actions taken by individuals and firms

A

Market system

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11
Q

Place where buyers and sellers come together to buy and sell goods, services and resources

A

Markets

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12
Q

Couples with the freedom to negotiate binding legal contracts, enables individuals and businesses to obtain, use, and dispose property resources as they see fit

A

Private property

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13
Q

The determination by customers the types and quantities of a good and service that will be produced with the scarce resources of the economy

A

Customer sovergnty

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14
Q

The tendency of competition to cause individuals and firms to unintentionally but quite effectively promote the interests of society even when each individual or firm is only attempting to pursue its own interests

A

Invisible hand

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15
Q

Illustrates those flows for a simplified economy in which there is no government

A

The circular flow diagram

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16
Q

All natural resources used in the production process

A

Land

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17
Q

Resource consists of the physical actions and mental activities that people contribute to the production of goods and services

A

Labor

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18
Q

All manufactured aids used in producing consumer goods and services

A

Capital

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19
Q

To describe spending that pays for the production and accumulation of capital goods

A

Investment

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20
Q

Do so indirectly by aiding the production of consumer goods

A

Capital good

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21
Q

Land, labor, capital and entrepreneurial ability

A

Factors of production

22
Q

Special human resource distinct from labor

A

Entrepreneurial ability

23
Q

Is a schedule or a curve that shows the various amounts of a product that consumers are willing and able to purchase

24
Q

Its a downward slope reflects the law of demand-people buy more of a product, service or resource

A

Demand curve

25
Products whose demand varies directly with money income
Normal income
26
A good or service whose consumption declines as income rises, prices held constant
Inferior goods
27
Is one that can be used in place of another good
Substitute good
28
Is one that is used together with another good
Complementary good
29
The principle that other things equal an increase in the price of a product will increase the quantity of it supplied and conversely for a price increase
Law of supply
30
A curve that illustrates the supply for a product by showing how each possible price is associated with a specific quantity supplied
Supply curve
31
The amount by which the quantity supplied of a product exceeds the quantity demanded at a specific price
Surplus
32
A graph that demonstrate the flow of inputs and outputs
Circular-flow diagram
33
There is a natural relationship between price and quantity demanded
Law of demand
34
There's possible relationships between price and quantity supply
Law of supply
35
Capita
Per person
36
recurring increases and decreases in the level of economic activity over periods of years: consists of peak, recession, through and expansion phases
Business cycles
37
Gross domestic product adjusted for inflation
Real GDP
38
Measured in terms of price level at time of measurements
Nominal GDP
39
Expenditures that increase the volume of physical capital; and intangible ideas that help produce goods and services
Investment
40
Sudden changes in demand
Demand shocks
41
Sudden change in supply
Supply shocks
42
Product prices that remain in place
Inflexible prices
43
Product prices that freely more upward or downward when product demand and supply changes
Flexible prices
44
y= C+ IG + G + XN
GDP equation
45
C=
Personal consumption
46
Spending by households on goods and services
Personal consumption
47
IG=
Gross domestic product
48
Spending on equipment, machinery, structures including new housing and changes in inventories
Gross domestic product
49
G=
Gross investment
50
Xn=
Exports minus imports
51