Midterme Flashcards
(51 cards)
What is the population and its goal?
Number of people in a country - even non-citizens
Goal increasing steadily
Inflation/ consumer price index, what is it ad what is the target control?
Mesures prices of fixed goods - how much they changed on average in one year. Target is between 1-3%
What are the eight categories that are considered in the change of price for inflation?
1) Food
2) Shelter
3) Household operations, furnishings, and equipment
4) Clothing and footwear
5) Transportation
6) Health and personal care
7) Recreation, education, and reading
8) Alcoholic beverages, tobacco products, and recreational cannabis
What is macroeconomics?5
1) It is the study of choices made by industries and businesses coordinated by markets and influenced by government.
2) Social Science of how people use limited resources to satisfy unlimited wants.
3) Study of the effects on the national/global economy of the choices made by business, industries, government.
4) Study of indicators: GDP, CPI, Unemployment, savings, consumption, international trade.
5) Models- creates forecast for the governement and large coorporations (evaluation of economic policies + business strategy) and to help them achieve socio-economic goals (economy growth, increase of population, full emloyment, rice staibilit).
Explain the concept of scarcity.
Wants always exeed resources. Wants are unlimited, but resources a limited.
So people need to choose what to produce and how much people consume.
Explain the concept of eficiency in marcoeconomics.
every resource is optimally allowcated to serve an industry, a business, or the governements interest.
Explain the difference of wants vs needs with examples
wants: clothing, electronics, education, tools (land, tools, equipment, capital, labor, knowledge)
need: food, water, shelter
Name the 4 points of rational decision making:
1) financial: money is limited + want to have more $for the value
2) social: consumers are influenced by trends
3) Morals: Values, beliefs, religion, education,
4) Scarcity: unlimited wants, limited resources.
Explain what capitalism is (PPP)
1) Private property - peole can invest money, owning resources.
2) Prizes are determined by suply, demand and competition.
3) Profit is maximized - limited intervention of the governement - markets
Describe what is pure command: PPM
Public ownership owned by governement (resources and land )
Prices are regulated by the state
ilitary has a major role
What is the demand - and what is the differenc between demand and wants?
Demand is how much stuff people are willing to buy. Price goes up - demand goes down.
Want = unlimited
Demand is what i would actually buy
Things that influence the demand:
1) price
2) non price - PEPIT
What means each letter of PEPIT and is it demand or supply?
Demand:
P = Price related goods (complements or substitutes)
E = Expectations (future prices, future income, product availability)
P = Population ( number of buyers changes )
I = Income ( normal good vs inferior good )
T = Tastes and preference
What is the difference between normal goods and inferior goods? examples
Normal goods are more expensive - luxury ( vacation, education)
Inferior goods are less expensive - ( bus passes, kraft diner )
What is the supply ? and what is the law of supply
The supply is the quantity of goods and services businesses are willing to sell. The law of supply is the law between the price and the quantity of goods/services.
Explain the statement: Ressources vs supply
ressources are used to produce. Supply is what is sold, what is transformed or used. Resources are needed to make supply.
What is an income statement?
You want to make as much profit as possible, to invest it, to make even more money.
What are the 2 things that can influence the supply?
1) price
2) non-price (PINTS)
Explain what each letter of PINTS means and if it is used in supply or demand ?
Supply
P = price expectations: withold inventory, produce less
I = input costs: costs related to production
N = number of firms: competition
T = technology and productivity: faster
S = subsidies or taxes: help from govt
Say what each of these letters mean:
P, d, e, q, qd, s, qs
P= price d= demand e= equilibrium q= quantity qd= quantity demanded s= supply qs= quantity supplied
What is the effect of unemployement on the GDP?
it goes down because less people are able to work aka produce.
What are the 4 steps to measure the number of people who are unemployed/employed?
1) Working-age - pourcentage of population. Higher population = higher opportunity
2) Labor force: people who can participate - employed and unemployed: students disabled people can’t work.
3) Level of unemployement - people without work
4) level of employment = labor force - unemployment
What are the three type of unemployment: describe
1) frictional: change job-to-job, skills do not apply to job, first job
2) Structural: mismatch training and availibility of jobs (includes seasonal and geographic)
3) cyclical: changes in business, depression/recession
Explain the situation of unemployment before the pandemic.
5.4-5.9% more jobs available than people who can work mostly structural supply of young people not keeping up Counting on immigrants
