Unit 1: Flashcards
What is macroeconomics? (Topic 1)
Macroeconomics is the study of how the major components of the economy, such
as consumer spending, investment spending, government policies, and exports interact.
Describe scarcity. (Topic 1)
Limited resources such as:
Labour - human effort, skilled workers, general labourers
Capital - tools, equipment, factories, buildings
Land - fertile soil, forests, fishing grounds, minerals in the ground
Enterprise/Entrepreneurship - very special talent, innovators who invent new product
Describe opportunity cost. (Topic 1)
Opportunity cost is the cost of what must be given up as a result of making one
decision over another.
The next best alternative that is given up as a result of making a particular choice
What is a trade off? (Topic 1)
Choosing one alternative over another.
Government spending being used for one cause versus another, one program
versus another, to help one group of individuals versus another.
What is microeconomics? (Topic 1)
Microeconomics studies the outcomes of the decisions made by people and firms
and includes topics supply and demand, the study of costs, and the nature of
market structures.
List the 7 economic goals. (Topic 2)
Income Equity
Price Stability
Full Employment
Economic Growth
Viable Balance Of Payments
Economic Efficiency
Environmental Stability
What is income equity? (Topic 2)
A country’s total output is distributed fairly. What is fair?
Value judgements come into play, defining and satisfying the goal of income equity
is controversial
What is price stability? (Topic 2)
Minimizing the country’s rate of inflation which is the rise in the general level of prices.
As prices increase, Canadians pay more to purchas
What is price stability? (Topic 2)
Minimizing the country’s rate of inflation which is the rise in the general level of prices.
As prices increase, Canadians pay more to purchas
What is full employment? (Topic 2)
Minimizing the country’s rate of unemployment. The unemployment rate is the
percentage of Canadians that are involuntarily unemployed.
Being unemployed results in a loss of personal potential and hardship.
A high unemployment rate translates into lower production levels
What is “viable balance of payments”. (Topic 2)
Countries engage in a constant flow of imports, export, and financial dealings
(borrowing and lending) with other countries.
A viable balance means that imports and exports are about the same; borrowing
and lending are also roughly the same.
The value of Canadian currency will also be a consideratio
What is economic growth? (Topic 2)
Maintaining a healthy rate of growth in the country’s economy.
Helps to raise the standard of living in a country
What is economic efficiency? (Topic 2)
Achieving the highest benefit from a country’s scarce economic resources
What is Environmental stability? (Topic 2)
Sustaining the quality of the country in which we live.
Minimizing the harm caused to the world’s air, water, and land resources caused
by economic activity.
What is economic significance? (Topic 3 - Economic thinking)
Determine the importance of economic policies, decisions, practices, issues,
trends, theories, and developments
● Determine the impact on individuals, groups, institutions, nations
● Explore how scarce economic resources are allocated
What is cause and effect? (Topic 3 - economic thinking)
Determine factors that affect or contribute to economic policies, decisions,
practices, trends, and developments
● Determine the consequences of these decisions
● Understand the complexity of causes and effects that can involve one or more
factors, one or more consequences, both intended and unintende
What is economic perspective? (Topic 3 - economic thinking)
Analyze the beliefs, values, interests, and influence that shape economic
policies, issues, and practices
● Learn that people have diverse perspectives on the same economic policies
and some groups may benefit and others may be disadvantage
● Economic developments may have social, cultural, and environmental effects
● Understand that your own economic perspective effects your personal
economic and financial decisions.
