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Economics Course Guide Flashcards

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1
Q

Micro

Non-price determinats of demand

A
  • Income
  • Tastes and preferences
  • Future price expectations
  • Price of related goods
  • Number of consumers
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2
Q

Micro

Assumptions underlying the law of supply (HL)

A
  • The law of diminishing marginal returns
  • Increasing marginal costs
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3
Q

Micro

Non-price determinants of supply

A
  • Changes in costs of factors of production
  • Prices of related goods
  • Indirect taxes and subsidies
  • Future price expectations
  • Changes in technology
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4
Q

Micro

Business objectives (HL)

A
  • Profit maximization
  • Alternative business objectives
    1. Corporate social responsibility
    2. Market share
    3. Satisficing
    4. Growth
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5
Q

Micro

Determinants of PED

A

Number and closeness of substitutes, degree of necessity, proportion of income spent on the good, and time

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6
Q

Micro

YED

A
  • Positive YED are normal goods and negative YED are inferior goods
  • YED less than 1 are necessities and YED greater than 1 are services and luxury goods
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7
Q

Micro

Determinants of PES

A

Time, mobility of factors of production, unused capacity, ability to store, rate at which costs increase

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8
Q

Micro

Reasons for government intervention in markets

A
  • Earn government revenue
  • Support firms
  • Support households on low incomes
  • Influence level of production
  • Influence the level consumption
  • Correct market failure
  • Promote equity
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9
Q

Micro

Main form of government intervention in markets

A
  • Price controls (price ceilings and price floors)
  • Indirect taxes and subsidies
  • Direct provision of services
  • Command and control regulations and legislation
  • Consumer nudges (HL)
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10
Q

Micro

Government intervention in response to externalities and common pool resources

A
  • Indirect (pigouvian) taxes
  • Carbon taxes
  • Legislation and regulation
  • Education
  • Tradable permits
  • International agreements
  • Collective self-governance
  • Subsidies
  • Government provision
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11
Q

Micro

Strengths and limitations of government policies to correct externalities and approaches to managing common pool resources

A
  • Challanges involved in measurement of externalities
  • Degree of effectiveness
  • Consequences for stakeholders
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12
Q

Micro

Government intervention in response to public goods

A
  • Direct provision
  • Contracting out to the private sector
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13
Q

Mirco

Response to asymmetric information (HL)

A
  • Government responses: legislation and regulation, and provision of information
  • Private response: signalling and screening
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14
Q

Micro

Oligopoly (HL)

A
  • Collusive versus non-collusive
  • Interdependence, risk of price war, incentive to collude, incentive to cheat
  • Allocative inefficiency (market failure) simple game theory payoff matrix
  • Price and non-price competition
  • Measurement of market concentration-concentration ratios
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15
Q

Micro

Monopolistic competition (HL)

A
  • Less market power due to many substitutes-more elastic demand curve compared with monopoly
  • Allocative ineffiency (market failure)
  • Less inefficiency, more product variety
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16
Q

Micro

Advantages of large firms having significant market power (HL)

A
  • Economies of scale including natural monopolies
  • Abnormal profits may finance investments in research and development, hence innovation
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17
Q

Micro

Risks in markets dominated by one or a few very large firms

A

Risks in terms of output, price, and consumer choice

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18
Q

Micro

Government intervention in response to abuse of significant market power

A
  • Legislation and regulation
  • Government ownership
  • Fines
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19
Q

Macro

Determinants of AD components

A
  • C: consumer confidence, interest rates, wealth, income taxes, level of household indebtedness, expectations of future price level
  • I: interest rates, business confidence, technology, business taxes, level of corporate indebtedness
  • G: political and economic priotities
  • X-M: income of trading partner, exchange rates, trade policies
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20
Q

Macro

Determinants of the Short-run aggregate supply (SRAS) curve

A
  • Costs of factors of production
  • Indirect taxes
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21
Q

Macro

Variations in aggregate demand and aggregate supply

A
  • Changes in the quantity and/or quality of factors of production
  • Improvements in technology
  • Increases in efficiency
  • Changes in institutions
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22
Q

Macro

Macroeconomic objectives

A
  • Economic growth
  • Low unemployment
  • Low and stable rate of inflation
  • Sustainable level of government (national) debt (HL)
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23
Q

Macro

Consequences of economic growth

Study These Flashcards
A
  • Impact on living standards
  • Impact on the enviornment
  • Impact on income distribution
24
Q

Macro

Potential conflic between macroeconomic objectives

Study These Flashcards
A
  • Low unemployment and low inflation
  • Trade-off between unemployment and inflation (Phillips curve - HL)
25
# Macro Causes of economic inequality and poverty
* Inequality of opportunity * Different levels of resource ownership * Different levels of human capital * Discrimination (gender, race and others) * Unequal status and power * Government tax and benefits policies * Globalisation and technological change * Market-based supply side policies
26
# Macro The role of taxation in reducing poverty, income and wealth inequalities
* Progressive, regressive and proportional taxes * Direct taxes (personal income, corporate income, wealth) * Indirect taxes
27
# Macro Further policies to reduce poverty, income and wealth inequality
* Policies to reduce inequalities of opportunities/investment in human capital * Transfer payments * Targeted spending on goods and services * Universal basic income * Policies to reduce descrimination * Minimum wages
28
# Macro Goals of monetary policy
* Low and stable rate of inflation * Low unemployment * Reduce business cycle fluctuations * Promote a stable economic enviornment for long-term growth * External balance
29
# Macro Constraints of monetary policy
* Limited scope of reducing interest rates, when close to zero * Low consumer and business confidence
30
# Macro Stregths of monetary policy
* Incremental, flexible and easily reversible * Short time lags
31
# Macro Goals of fiscal policy
* Low and stable inflation * Low unemployment * Promote a stable economic enviornment for long-term growth * Reduce business cycle fluctuations * Equitable distribution of income * External balance
32
# Macro Constrains on fiscal policy
* Political pressure * Time lags * Sustainable debt * Crowding out (HL)
33
# Macro Strengths of fiscal policy
* Targeting of specific economic sectors * Government spending effective in deep recession
34
# Macro Goals of supply-side policies
* Long-term growth by increasing the economy's productive capacity * Improving competition and efficiency * Reducing labor costs and unemployment through labor market flexibility * Reducing inflation to improve international competitiveness * Increasing firms' incentives to invest in innovation by reducing costs
35
# Macro Market-based policies
* Policies to encourage competition: deregulation, privatization, trade liberalization, anti-monopoly regulation * Labor and market policies: reducing the power of labor unions, reducing unemployment benefits, abolishing minimum wages * Incentive-related policies: personal income tax cuts, cuts in business tax and capital tax gains
36
# Macro Interventionist policies
* Education and training * Improving quality, quantity and access to health care * Research and development * Provision of infrastructure * Industrial policies
37
# Macro Constraints on supply-side polices
* Market based: equity issues, time lags, vested interests, enviornmental impacts * Interventionist: costs, time lags
38
# Macro Strengths of supply side policies
* Market based: improved resource allocation, no burden on government budget * Interventionist: direct support of sectors important for growth
39
# Global Benefits of international trade
* Increased competition * Lower prices * Greater choice * Acquisition of resources * More foreign exchange earnings * Access to larger markets * Economies of scale * More efficient resource allocation * More efficient production
40
# Macro Arguments for/advantages of trade protection
* Protection of infant industries * National security * Health and safety * Enviornmental standards * Anti-dumping * Unfair competition * Balance of payments correction * Government revenue * Protection of jobs * Economically least developed country (ELDC) diversification
41
# Global Arguments against/disadvantages of trade protection
* Misallocation of resources * Retaliation * Increased costs * Higher prices * Less choice * Domestic firms lack incentive to become more efficient * Reduced export competitiveness
42
# Global Advantages of trading blocs
* Trade creation (HL) * Greater access to markets offer potential for economies of scale * Greater employment opportunities * May allow for stronger bargaining power in multilateral negotiations * Greater political stability and cooperation
43
# Global Disadvantages of trading blocs
* Trade diversion (HL) * Loss of sovereignty * Challange to multilateral negotiations
44
# Global Advantages of monetary union (HL)
* Foster greate trade * Economic integration * Price transparency
45
# Global Disadvantages of monetary union (HL)
* Loss of monetary policy independence * Vulnerability to asymmetric shocks
46
# Global Obectives of WTO
* Raise living standards * Create jobs * Improve people's lives
47
# Global Factors of changes in demand and supply for currency
* Foreign demand for exports * Domestic demand for imports * Inward/outward foreign direct investment * Inward/outward portfolio investment * Remittances * Speculation * Relative inflation rates * Relative interest rates * Relative growth rates * Central bank intervention
48
# Global Components of the balance of payments
* Current account: balance of trade in goods, balance of trade in services, income, current transfers * Capital account: capital tranfers, transaction in non-produced, non-financial assets * Financial account: foreign direct investment (FDI), protfolio investment, reserve assets, official borrowing
49
# Global Methods to correct a persistent current account deficit (HL)
* Expenditure switching * Expenditure reducing * Supply-side polices
50
# Global Measuring development: single indicators
* GDP/GNI per capita at PPP * Health and eduaction indicators * Economic/social inequality indicators * Energy indicators * Enviornmental indicators
51
# Global Measuring development: composite indicators
* Human Development Index (HDI) * Gender Inequality Index (GII) * Inequality adjusted Human Development Index (IHDI) * Happy Planet Index
52
# Global Economic barriers
* Rising economic inequality * Lack of access to infrastructure and appropriate technology * Low levels of human capital-lack of access to healthcare and education * Dependence on primary sector production * Lack of access to international markets * Informal economy * Capital flight * Indebtedness * Geography including landlocked countries * Tropical climates and endemic diseases
53
# Global Political and social barriers
* Weak institutional framework: legal system, ineffective taxation structures, banking system, property rights * Gender inequality * Lack of good governance/corruption * Unequal political power and status
54
# Global Strageties to promote economic growth and/or economic development
* Trade strageties: import substitution, export promotion, economic integration * Diversification * Social enterprise * Marker-based policies: trade liberalization, privatization, deregulation * Interventionist polices: redistribution policies including tax polices, tranfer payments and minimum wages * Provision of merit goods: education programs, health programs, infrastructure * Inward foreign direct investment * Foreign aid: humanitarian aid/development aid, debt relief, Official Development Assistance (ODA), non-governmental organizations (NGOs) * Multilateral development assistance: the world bank, international monetary fund * Institutional change: improved access to banking, increasing women's empowerment, reducing corruption, property rights, land rights
55
# Global Functions of the WTO
* Trade negotiations * Promoting fair competition * Facilitation of trade
56
# Global Functions of the IMF
* Financial assistance * Policy advice * Surveillance
57
# Global Functions of an NGO
* Plan and implement specific projects in developing countries. * Act as a lobbyist to influence public policy in poverty reduction, workers' rights, human rights, and the environment.

Econ (4 decks)

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