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CSET SS III
Economics
| Question | Answer |
|---|---|
| Micro Economics | How consumers and producers affect the market through supply and demand. |
| Supply and Demand | Theory that the rate of the supplies of goods and services adjusts at the same rate as the demand for them. |
| Equilibrium Price | The price consumers are willing to buy and producers sell at. |
| Opportunity Cost | The loss of potential gain from one choice when another choice is made |
| Fixed Cost | Business costs that are constant whatever the quantity of goods are services are produced (salaries, rent, insurance, taxes) |
| Variable Cost | Costs related to the quantity produced (materials, transportation, hourly workers) |
| Total Cost | Fixed and variable costs |
| Marginal Cost | The cost added by producing more. How the variable costs affect the total cost. |
| Production Possibilities Frontier | A graph showing all combinations of output of 2 goods that can be produced with available resources. Scarcity + choice + opportunity cost. (Guns and butter) |
| Normal Profit | When total profit minus costs is $0 |
| Accounting Profit | True revenue. Found by total revenue minus the dollar costs. |
| Economic Profit | Total revenue minus all costs |
| Law of Diminishing Returns | The point at which the profits gained is less than the amount of money or energy invested. (Happens when marginal cost rises) |
| Incentives | Monetary, Non-Monetary (moral), Coercive |
| "Wealth of Nations" | Adam Smith, the Found of Economics. The invisible hand guides individuals to act in their best interest, which then promotes society's interests. |
| Macro Economics | Study of the total behavior plus structures of the economy |
| Monetary Policy | Decisions made by the Federal Reserve for interest rates, controlled by the flow of cash. |
| Fiscal Policy | President and Congress decide on budgets, unemployment, borrowing, interests, social security, and Medicare |
| Liberal Property Rights | private property |
| Socialist Property Rights | some public property |
| Communism | Community-held property |
| Planned Economies | Government run |
| Market Economies | Capitalism. Individuals and firms make most decisions. Ruled by Supply/Demand and labor division. Resources must be productive to be rewarded. |
| Traditional Economies | tribe bartering |
| GDP | Gross Domestic Product. The monetary value of all goods/services made within a country. Economic output in 1 year. |
| GNP | Gross National Product. GDP + the value of products made outside the country's borders |
| Stock Market | buy, sell, and trade stocks to increase capital |
| Commodities Market | buy, sell, and trade products; distribute commodities |
| Derivatives Markets | Contract agreement to distribute risk through forwards, futures, options, and swaps |
| Price Floor | Artificially imposed minimum price that creates a labor surplus (minimum wage) |
| Price Ceiling | Artificial cap on the price of a good resulting in lower prices, but higher wait times (rent control) |
| Price Index | Change in prices of certain goods and services in a period of time |
| Economic functions of a government | Regulate, tax, finance the government |
| Fiscal Expansion | Congress and President spend more than income (debt) |
| Monetary Expansion | Federal Reserve increases the total supply of money |
| Fiscal Contractionary | Congress and President spend less than income (surplus) |
| Monetary Contractionary | Decrease the supply of money |
| Interest Rates | Measure the supply of money in the economy, a tool to control the supply |
| Knights of Labor | 1869, First major national union |
| American Federation of Labor | 1886, founded by Samuel Gompers as a craft union of skilled laborers |
| Congress of Industrial Organizations | 1938, industry-wide with skilled and unskilled workers |
| AFLCIO | Merger of American Federation of Labor and Congress of Industrial Organizations in 1955 |
| Comparative Advantage | Ability of one country to produce goods and services at a lower opportunity cost than another. Benefits the domestic economy by lowering the cost of production. |
| Protectionism | The government's use of trade barriers to limit foreign imports |
| Dumping | Lower the price of exports to unfairly gain a share in a foreign country |
| NAFTA | 1994, North American Free Trade Agreement established free trade zones in much of US, Canada, and Mexico |
| GATT | 1947-1995, General Agreement on Tariffs and Trade to strengthen trade cooperation post WWII. |
| WTO | World Trade Organization replaced GATT in 1995 to promote free trade and globalization |
| Balance of Trade | Country A may buy more from Country B than it sells (deficit) but sell more to country C than it buys (surplus) |
| Pegged/Fixed Exchange Rate | Set at a relative rate to another currency for stability, but prevents effective competition |
| Flexible/Free Exchange Rate | Allowed to float against another currency based on supply in demand. Used in world trade. |
| Economic Distribution | Distribution of total income among individuals or factors of production. |
| Price Control | Restrictive law setting how high or low a market price may go. |
| Combat Inflation | Increase taxes, decrease government spending |
| Globalization | Internet, collapse of USSR, opening of China to capitalism |
| Import Taxes | Primary source of US government founding until the early 20th century |
| Appreciation | Increase in value over time |
| Excise tax | A tax on a certain good |
Created by:
johea
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