Economics /Economics 101 Flashcards
What is the law of supply?
The law of supply states that, other things equal, an increase in price leads to an increase in quantity supplied.
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Key Terms
Term
Definition
What is the law of supply?
The law of supply states that, other things equal, an increase in price leads to an increase in quantity supplied.
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What is the law of demand?
The law of demand states that, other things equal, an increase in price leads to a decrease in quantity demanded.
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What is perfect competition?
Perfect competition is a market structure characterized by a large number of buyers and sellers, homogeneous products, and easy entry and exit.
What is monopoly?
Monopoly is a market structure characterized by a single seller, significant barriers to entry, and unique products.
What is fiscal policy?
Fiscal policy refers to the government's use of spending and taxation to influence the economy.
What is the difference between expansionary and contractionary fiscal policy?
Expansionary fiscal policy involves increasing government spending or decreasing taxes to stimulate economic growth, while contractionary fiscal polic...
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| Term | Definition |
|---|---|
What is the law of supply? | The law of supply states that, other things equal, an increase in price leads to an increase in quantity supplied. |
What is the law of demand? | The law of demand states that, other things equal, an increase in price leads to a decrease in quantity demanded. |
What is perfect competition? | Perfect competition is a market structure characterized by a large number of buyers and sellers, homogeneous products, and easy entry and exit. |
What is monopoly? | Monopoly is a market structure characterized by a single seller, significant barriers to entry, and unique products. |
What is fiscal policy? | Fiscal policy refers to the government's use of spending and taxation to influence the economy. |
What is the difference between expansionary and contractionary fiscal policy? | Expansionary fiscal policy involves increasing government spending or decreasing taxes to stimulate economic growth, while contractionary fiscal policy involves decreasing government spending or increasing taxes to reduce inflation. |
What is the Phillips curve? | The Phillips curve is a historical inverse relationship between rates of unemployment and corresponding rates of inflation. |
What is comparative advantage? | Comparative advantage is the ability of a party to produce a particular good or service at a lower opportunity cost than another party. |
What is the difference between positive and normative economics? | Positive economics deals with positive statements that are factual and can be tested, while normative economics deals with value judgments and policy recommendations. |
What is the difference between microeconomics and macroeconomics? | Microeconomics studies individual economic units, such as households and firms, and their interactions, while macroeconomics studies the economy as a whole, focusing on aggregate indicators like GDP and inflation. |
What is the difference between a stock and a flow? | A stock is a quantity measured at a specific point in time, while a flow is a quantity measured over a period of time. |
What is the difference between real and nominal GDP? | Real GDP adjusts for inflation and measures the value of goods and services in constant prices, while nominal GDP does not adjust for inflation and measures the value of goods and services in current prices. |
What is the multiplier effect? | The multiplier effect is the idea that an increase in spending can have a larger impact on GDP due to repeated rounds of spending. |
What is the difference between a recession and a depression? | A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, while a depression is a more severe and prolonged recession. |
What is the role of the Federal Reserve? | The Federal Reserve is the central bank of the United States, responsible for implementing monetary policy, regulating banks, and maintaining the stability of the financial system. |