Final Review Economics

Non-Excludable Public Good – Good that can not be prohibited for anyone
input costs – the price of the resources used to make a product
Deflation – a sustained fall in the general price level.
superior goods – income-elastic goods with a positive YED
Education is valuable because of its:
a. scarcity and demand
b. scarcity and utility
c. supply and demand
d. value and efficiency – b. scarcity and utility
Frictional unemployment – A type of unemployment that occurs when workers are between jobs, workers make leave their job because they have been fired, or because their employers went out of business, or because they are in search of a better job, or they may be waiting to begin a new job.
silver certificates – a certificate in which you can go to the government and exchange for actual silver.
Figure 4.1: The Loanable Funds Market Reference: Ref 4-1 (Figure 4.1: The Loanable Funds Market) If firms believe the economy will begin to pick up in the future, the ________ of(for) loanable funds will shift from ________ and the real interest rate will ________.
trade – The exchange of goods and services between people and countries.
Value added tax – This is a tax on a wide range of goods and services. The rate is usually 17.5%. Reduce business costs which increases supply.
Supply – The stock/amount of something available for use
Figure 4.1: The Lоаnаble Funds Mаrket Reference: Ref 4-1 (Figure 4.1: The Lоanable Funds Market) If firms believe the ecоnomy will begin to pick up in the future, the ________ of(for) loanable funds will shift from ________ and the real interest rate will ________.
Unitary elasticity – when price elasticity equals -1.0, which is were total revenue is maximized at that price. a 1% increase in price leads to a 1% decrease in quantity demanded.
Subsidies * – Government payments given to certain industries to help offset some of their costs of production. It has the effect of shifting the curve vertically downwards.
Peak – the height of an economic expansion, when real GDP stops rising
Market Failure – When market fails to be free/doesn't do what society wants (externalities, informational asymmetry, public goods) – makes it difficult for consumers to make rational decisions
centrally planned economy – aka command economy; An economy in which the government decides how economic resources will be allocated (e.g. Cuba. North Korea)

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