Jeopardy!. Begin. Key Terms. Unemployment/Inflation. Supply. Demand. GDP. Misc. $100. $100. $100. $100. $100. $100. $200. $200. $200. $200. $200. $200. $300. $300. $300. $300. $300. $300. $400. $400. $400. $400. $400. $400. $500. $500. $500. $500. $500. $500.
What is the law of supply?
The higher the price for a good or service, all other things being equal, leads suppliers to supply a greater quantity of that good or service
What kind of relationship is present in the law of supply and why?
Positive/direct relationship because at higher prices, profit-seeking firms have an incentive to produce more
What are the shifters of supply?
What is the difference between a long-run aggregate supply curve and a short-run aggregate supply curve?
Wages and prices will increase as price levels increase in a LRAS; wages and princes will not increase as price levels increase in a SRAS
What are the shifters of aggregate supply?
What is the law of demand?
The higher the price for a good or service, al other things being equal, leads people to demand a smaller quantity of that good or service
What type of relationship can be found in the law of demand and what does that say about the slope?
Inverse relationship; demand curve will slope downward
What are the shifters of demand?
What shifts the aggregate demand curve?
What are the determinants of aggregate demand?
How is GDP calculated?
How is the percent change in GDP, from year to year, calculated?
(Year 2-year 1)/Year 1 x 100
What is the best measure of a nation’s standard of living?
Real GDP per capita
What is the difference between real GDP and nominal GDP?
Real GDP is expressed in constant dollars and nominal GDP is measured in current prices
Why do some countries have higher GDPs than others?
What is unemployment rate?
The percent of people in the labor force who want a job but are not working
Who is in the labor force?
People above 16 years old, able and willing to work, not institutionalized, not in the military, in school full time, or retired
What is the main effect of inflation?
It reduces the purchasing power of money; each dollar of income will buy fewer goods and services
What are the three causes of inflation?
Who is hurt by inflation? Who is helped?
Hurt- lenders, people with a fixed income, savers
Helped- debtors, a business where the price of the product increases faster than the price of resources
What is consumer price index (CPI)?
Most commonly used measurement of inflation for consumers
What does the business cycle show?
How the national economy fluctuates resulting in periods of boom and bust
What is the government’s role in the economy?
Prevent unemployment and prevent inflation at the same time
What is the Invisible Hand?
Society’s goals will be met as individuals seek their own self-interest
All decisions involve trade-offs. What are trade-offs?
Alternatives that we give up whenever we choose one course of action over others
Define opportunity cost.
The real cost of an item, what you must give up in order to get it
What are the factors of production?
Land, labor, capital, entrepreneurship
Define automatic stabilizer.
Government spending and taxation rules that cause a fiscal policy to be automatically expansionary when the economy contracts and automatically contractionary when the economy expands, without requiring any deliberate action by policy makers
What is scarcity?
Resources are not unlimited and are not available in sufficient quantities to satisfy all the various ways a society wants to use them
What is gross domestic product (GDP)?
The total value of all final goods and services produced in the economy during a given year