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Comps- Econ
econ comps
| Question | Answer |
|---|---|
| Macroeconomics | the study of how an entire economy functions, including the large-scale economic factors that influence it. |
| equilibrium price and quantity | where supply equals demand, no surplus or shortage |
| changes in equilibrium | -demand increases (higher price / quantity) -demand decreases (lower price/ quantity) -supply increases (lower price; higher quantity) -supply decreases (higher price; lower quantity) |
| elasticity of demand | measures how much demand changes with price (determined by substitutes, necessity, income share, time |
| elastic | sensitive to price changes |
| inelastic | not sensitive to price changes |
| Microeconomics | part of economics concerned with single factors and the effects of individual decisions. |
| fc | fixed costs (do not change with output) |
| vc | variable costs (change with output) |
| tc | total costs (TC= FC+ VC) |
| mc | marginal costs (cost of producing one more unit) |
| optimal price and quantity | Pure competition : produce where MC= Market price Monopoly : produce where MR = MC, set price above MC |
| macroeconomic data (Inflation) | measures by using CPI or GDP deflator inflation rate equation= ( CPI in year 2 - CPI in year 1) / (CPI in year 1) x 100 |
| macroeconomic data (unemployment) | unemployment rate = (unemployed / labor force ) x 100 types: frictional, structural, cyclical |
| macroeconomic data (GDP) | GDP = C + I + G + (X-M) nominal vs real gdp - adjust for inflation |
| macroeconomic theory ( AS/AD model) aggregate supply (AS) | total production in the economy |
| macroeconomic theory ( AS/AD model) aggregate demand (AD) | total spending money in the economy |
| macroeconomic theory ( AS/AD model) (inflation causes) | demand pull (higher AD) or cost push (higher production cost) |
| macroeconomic theory ( AS/AD model) (unemployment causes) | recessionary gap ( AD shifts left) |
| Monetary policy | fed uses tools like interest rate, open market operation, and reserve requirements |
| Monetary policy lower rates | fight unemployment |
| Monetary policy higher rates | fight inflation |
| Fiscal Policy | government adjusts spending taxes |
| Fiscal Policy, increase spending or cut taxes | fight unemployment |
| Fiscal Policy, decrease spending or raise taxes | fight inflation |
Created by:
lilymillsaps
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