Module 3 - Macroeconomics to Monetary Policy Flashcards
examines either the economy as a whole or its basic subdivisions or aggregates such as the government, household, and business sectors.
Macroeconomics
refers to the total amount of goods and services a country produces. This figure is like a snapshot of the economy at a certain point in time.
GDP or Gross Domestic Product
Gross Domestic Product Calculation
(1) Expenditure method
(2) Income method
(3) Production method
is the extra amount of output a business can generate by adding one or more workers.
Marginal Product of labor
is the sum of the costs for each of the inputs.
Total cost production
is the added cost to produce one more unit of output.
Marginal cost
is the amount of money companies get from selling their products or services.
Revenue
is the added revenue from producing and selling one more unit of output.
Marginal Revenue
focuses in achieving the highest profit
Short term profit maximization
assumes that a business can vary all its inputs even going as far shutting down.
Long term profit maximization
is a fluctuation in aggregate economic output that lasts for several years.
Business cycles
the time from trough, recovery and all the way to the next peak.
Expansion
when the economy hits a high point and start heading downward
Peak
a period of negative GDP growth
Recession
the date on which the recession ends
Trough
