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GraphsGraphsSupplySupplyAnd And

Demand Demand

PoliciesPoliciesAndAnd

MarketsMarketsEconomies

ImportantImportantKey Key

TermsTermsGDPGDP

- $100- $100

What is the meaning of GDP?

Gross Domestic Product

- $200

What equation is used to find GDP?

C+I+G+X-mConsumption + Investments + Government Spending + (Exports-Imports)

- $300

What is real GDP?

It is a macroeconomic measure in which outputs are adjusted for changes. (Inflation, deflation etc.)

- $400

“Market Value” of the gross domestic product refers to..

The dollar value of final goods and services expressed in either current or constant dollars.

- $500

The most important part of GDP is?

Consumption

- $100

What does this graph represent?

The Business Cycle

- $200

In This PPC/PPF the pattern going down the curve is what?

It is at a constant speed.

- $300

What Is the relationship that supply and demand share?

An inverse relationship

- $400

What is this graph describing?

The relationship of the Long and Short Range Aggregate Supply as the Aggregate demand is constant.

- $500

According to this circular flow graph, when households consume

goods where does it go?

Product Market

- $100

What is the law of demand?

The higher the price for a good or service, all other things being equal, leads people to demand a smaller quantity of that good or service.

- $200

What is the law of supply?

The higher the price for a good or service, all other things being equal, leads suppliers to supply a greater quantity of that good or service.

- $300

What are the shifters of demand?

Tastes and Preferences, Number of Consumers, Price of Related Goods, Income, and Future Expectations.

- $400

Why Are Aggregate Demand and Supply so different from normal

Supply and Demand?

Aggregate of both is the supply and demand already existing in the economy, while the normal ones go according to current situations.

- $500

What are the shifters of supply?

Prices/Availability of inputs, # of sellers, Technology, Government Action: Taxes and Subsidies, Opportunity Cost of Alternative Production, Expectations of Future Profit.

- $100

What is the resource market?

A market place for the exchange of labor, capital or raw materials.

- $200

What is the product market?

The market place in which a final or finished goods and services is bought by consumers.

- $300

How is fiscal policy?

the use of government revenue collection and expenditure to influence the economy.

- $400

What is monetary policy?

the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability

- $500

A Market Basket is a…

Hypothetical set of consumer purchases of goods and services

- $100

What would a positive economic situation resemble?

This is an economy in which the analysis of the economy are direct and how it is working at the moment.

- $200

A normative economic view…

Discusses how the government should be working.

- $300

Centrally planned economies involve..

A system in which decisions are made by the state or government rather than by interaction between consumers and businesses.

- $400

A Free Market economy…

Is based on supply and demand with little or no government control. Buyers and sellers are allowed to transact freely based on mutual government.

- $500

If a businessman wanted to open up a hardware store with as much liberty as he can, what kind of

economy would he want to be a part of?

Free Market Economy

- $100

What are intermediate goods?

It is a good or service that is used in the eventual production of a final good, or finished product.

- $200

What is the meaning of deflation?

A decline in the aggregate price level over some defined time period.

- $300

What is the spending multiplier?

The relationship between an autonomous spending shock and eventual changes in aggregate income.

- $400

What is CPI?

Consumer Price Index: A weighted average of the prices of a representative market basket of goods and services that represents consumption patterns in some base time period.

- $500

What does the latin phrase, ceteris paribus, mean?

it stands for “holding other things constant“. used for indicating the effect of one economic variable on another. One economic variable may affect the other.