Economics Flashcards
(18 cards)
Macroeconomics studies:
Large scale economic issues like unemployment, interest rates, price levels, national income
Opportunity Cost
Like someone mowing your lawn for cash when you want to do something else
Free Market System does not involve
government interventions or watching monopolies
Indicators of economic growth include:
GDP, Unemployment, Inflation rates
What is the Federal Reserve?
Bank for Banks - controls the value of money for the US
When does a recession occur in the business cycle?
Between the Contraction and Trough (booming between the trough to a peak)
All four in the cycle: Trough, Expansion, Peak, Contraction - back to trough
Negative demographic indicators would be:
low literacy rates, low life expectancy, high infant mortality rates
What options sustain monetary policies?
open market operations, assuring bank reserves, adjusting interest rates (NOT closing markets)
What determins the money exchange in a floating or flexible exchange?
The market (the government can intervene in exchange but has pros and cons
As inflation increases,
purchasing power decreases
The value of goods and services matter more than their
quantity
Fiat Money
is supply and demand (paper money)
(commodity - precious metals)
(bank money - credited)
Contractionary money policy is:
increases the unemployment rate due to slowdowns in econmomic growth, decreases loans or borrowing, decreases consumer spending (downside it business cycle)
Frictional uemployment is best characterized as:
when a qualified person cannot be matched to a job (over educated / trained)
Economic growth is measured by:
GDP , GNP, etc.
Who is in control of a command economy?
The government
What correctly lists the factors of production?
land, labor, capital, entrepeneurship
The central bank does the following:
Manages interest rates, backs up commercial banks, sets reserve requirements (does not set tax rate)
