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Flashcards in Midterm Deck (16):
1

Determinants of Market Demand

1. Tastes (desires for this and other goods)
2. Income
3. Other goods (their availability and price)
4. Expectations (for income, prices, tastes)
Number of buyers

2

Determinants of Market Supply

Technology
Factor cost
Other goods
Taxes and subsidies
Expectations
Number of sellers

3

Law of supply

larger quantities will be offered for sale at higher prices

4

law of demand

quantity of a good demanded in a given time period increases as its price falls

5

GDP equation

GDP = C + I + G + (X-M)

6

Types of Unemploment

Seasonal
Frictional
Structural
Cyclical

7

Frictional Unemployment

brief periods of unemployment by people changing employment or joining labor force

8

Structural Unemployment

unemployment caused by a mismatch between skills (or location) of job seekers and the requirements of available jobs. (good for long term economy)

9

Cyclical Unemployment

unemployment attributable to a lack of job vacancies, that is, to an inadequate level of aggregate demand.

10

natural rate of unemployment

long-term rate of unemployment determined by structural forces in labor and market products.

11

underemployment

People seeking full time paid employment who work only part time or are employed at jobs below their capacity.

12

Circular Flow Model

households, firms, factor market, product markets
factor market: rents, wages, interest, profits

13

Inflationary gap

Y > Yf

14

Recessionary gap

Y < Yf

15

Yd =

Yp - Tx + Tf

16

Yp =

r + w + i + p