Economics Unit 12: Economic Performance

oligopoly – only a few sellers of standardized or differentiated product, so each firm is affected by the decisions of its rivals and must take those decisions into account in determining its own price and output
That is the government's primary role in the Circular Flow Diagram? – Make sure businesses and individuals operate legally and fairly.
Allocative efficiency – The distribution of resources among firms and industries to prudence the goods most wanted by divert
Elasticity – Measure of response in demand based on change in price
Economic system – A set of institutional arrangements to determine how to distribute scarce resources to satisfy peoples wants
Import – We get goods and services to us
Appreciate – currency strengthens
what is a revenue tariff? – attempt to make money for the government
nonprice competition – goal of product differentiation, to make price less of a factor in consumer purchases and make product differences a great factor. if successful, firm's demand curve will shift to the right and will become less elastic.
According to the simple deposit multiplier model, when the required reserve ratio is 6%, how much does the Federal Reserve need to raise reserves by in order to get deposit accounts to increase by exactly $900,000. 
Opportunity Costs – The most desirable alternative given up as the result of a decision (second choice)
Characteristics of money – Easily produced, limited in supply, portable, recognisable, divisible, durable, acceptable
Adam Smith – Founder of Modern Economics
Author of The Wealth of Nations
Laissez Faire
The invisible hand
Accоrding tо the simple depоsit multiplier model, when the required reserve rаtio is 6%, how much does the Federаl Reserve need to rаise reserves by in order to get deposit accounts to increase by exactly $900,000. 
CPI – Consumer price index – A measure of inflation
Welfare – Government aid to the poor.
Business cycle – the continuous sequence of ups and downs in the economy

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