Economics Flashcards
(29 cards)
What is the basic activity used to illustrate supply and demand?
Basic supply and demand activity: 6/10 need to
What are the components of the aggregate demand formula?
AD = C + G + I + (X - M)
What does GDP stand for?
Gross Domestic Product
What does GNI stand for?
Gross National Income
What are the benefits of trade?
Development, Sustainable development
What is the purpose of a tariff?
To protect domestic industries by increasing the price of imported goods
What is a trade quota?
A limit on the quantity of a good that can be imported or exported
What is a subsidy?
Financial support given by the government to encourage production or consumption
What are the main objectives of macroeconomic policy?
Low inflation, Low unemployment, Sustainable growth
What are externalities?
Costs or benefits that affect third parties not involved in an economic transaction
Define market failure.
A situation where the allocation of goods and services is not efficient
What is asymmetric information?
A situation where one party has more or better information than the other
What is adverse selection?
A situation where one party in a transaction has information that the other party lacks
What is moral hazard?
When one party takes risks because they do not bear the full consequences of their actions
What does the Phillips curve illustrate?
The inverse relationship between inflation and unemployment
What are the types of unemployment?
Frictional, Structural, Cyclical, Seasonal
What is the balance of payments?
A record of all economic transactions between residents of a country and the rest of the world
What are supply-side policies?
Policies aimed at increasing productivity and shifting the aggregate supply curve to the right
Fill in the blank: The average rent in Berlin in 2020 was _______.
[specific value not provided]
What is behavioral economics?
A field of economics that examines the effects of psychological factors on economic decision-making
What is the significance of the financial account in the balance of payments?
It records all transactions involving financial assets
What is global exchange rate?
The rate at which one currency can be exchanged for another
True or False: Sustainable growth implies that development can occur without depleting natural resources.
True
What are primary goods?
Raw materials and basic goods that are used in the production of other goods
