CH1:Economics and Economies Flashcards
(49 cards)
What does abduction mean?
-using pieces of evidence to develop a plausible explanation.
-this can be further tested by gathering more evidence
what does the term AGGREGATE DEMAND mean?
the total level of spending in the economy
what does the term AGGREGATE SUPPLY mean?
the total amount of output in the economy
what does the term ALLOCATIVE EFFICIENCY mean?
-current combination of goods produced gives the maximum satisfaction for each consumer at their current levels of income
-if the income was given out differently it would lead to a different variety of goods that was efficient
what does the term BALANCE OF TRADE mean?
exports of goods and services MINUS imports and services
If exports is greater than imports it means that there is a balance of trade surplus
(positive figure)
if imports exceeds more than exports that means there is balance of trade deficit (negative figure)
what does the term BARTER ECONOMY?
this is where people trade with good and services WITHOUT the payment of money.
WORKERS would be paid in bundles of good.
what does the latin term CETERIS PARIBUS mean
this just mean other things being equal
this assumption can only be made when making deduction theories
what does the term CONSUMPTION?
the act of using goods and services to satisfy wants.
like purchasing a good or service
what does the term DEDUCTION mean?
this means using a theory to draw conclusion and specific circumstances.
what does the term DEMAND SIDE POLICY mean?
-this is a government policy
-to alter the levels of aggregate demand
-like the level of output,employment and prices
what does the term ECONOMIC DEFICIENCY mean?
where each goods is produced at the minimum cost and where individual people and firms get the max benefit from this
what does the term EQUILIBRIUM mean?
position of balance
this position has no inherent tendency to move away
what does the term EQUILIBRIUM PRICE mean?
the price when the quantity demands is EQUAL to the quantity supplied
when the price has no shortage or surplus
what does the term EQUITY mean?
-a distribution of income that is known to be fair
what does the term FACTORS OF PRODUCTION mean?
-inputs into the production of goods and services
eg:labour,land and raw material and capital
what does the term FREE MARKET ECONOMY mean?
an economy where all decision are taken by individual households and firms without government intervention.
what does the term INCREASING OPPORTUNITY COST mean?
this is when an additional production of one good involves a ever increasing sacrifices of another.
what does the term INDUCTION mean?
constructing general theories on the basis of specific observation
what does the term INFLATION mean?
a general rise in the level of prices throughout the whole economy
what does the term INFORMAL SECTOR mean?
part of an economy where it involves production or exchange but no money payments
what does the term INPUT-OUTPUT ANALYSIS mean?
-means to divide the economy into sectors
-where each sectors is a user of inputs from and a supplier of outputs in other sectors.
-this examines how these inputs and outputs can be matched to the total resources available in the economy
what does the term INVESTMENT mean?
a production of items that are not for immediate consumption
what does the term MACROECONOMICS mean?
the study of economic aggregates like grand totals
-this includes the overall level of prices and the output and employment in that country
what does the term MARGINAL BENEFIT mean?
the additional benefit of doing a little bit more of an activity
