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Debt overhang, HIPC
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Is velocity stable over time
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Y
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Debt service ratio, sovereign debt
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Saving
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the part of disposable income households do not spend for consumer goods and services
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Mao Zedong
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led Great Proletarian Culture Revolution, 1966-69
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Keynes
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1936; "The General Theory of Employment, Interest and Money" aggregate demand for goods and services determines the level of employment instead of prices and wages, After WWII his views began to influence
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Define: Entrepreneurship
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the imagination, innovative thinking, and management skills needed to start and operate a business
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Value of Money
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-Will decrease as inflation increases
-will increase as deflation increases
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imperfect competition
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liberals consider this a market failure if it reduces "consumer sovereignty," yet conservatives consider it beneficial as a natural result of "survival of the fittest"
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law of supply
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The positive relationship between price and quantity supplied, when all other factors that influence supply are held fixed.
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average variable cost
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AVC = VC / Q
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portability
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the state or quality of being portable.
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economies of scale
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the property whereby long-run average total cost falls as the quantity of output increases
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Comparative Advantage
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The person who has a smaller opportunity cost in production
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HO Assumption: 132 Factors of Production
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Labor and Capital
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former GDR
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a command socialist economy with a Marxist orientation
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comparative advantage implies choosing the activity which
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has the lower opp cost
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______ are a good way to organize economic activity
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Markets
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final goods
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goods and sercies that have been purchased for final use and nor for resale or further processing or manufacturing.
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Define: Specialization
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a process in which businesses and people focus on producing one or a few parts of an entire product
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moving production from a high cost producer to a low-cost producer will
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rais total surplus
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Elizabeth II
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Queen of the United Kingdom (UK) of Great Britain
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The budget line
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Indicates all of the combinations of food(x) and clothing(y) that a person can purchase if they spend all of their available income on the two goods. Expressed as: PxX+PyY=I.
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Move together
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A firm with lower interanl welath is likely to suffer ____(less,more,same) from the bank lending channel
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Price Elasticity of Supply
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The percentage change in quantity supplied of a good or service caused by a one percent change in its price
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sunk cost
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once its invested its gone and never coming back
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Real Bills Doctrine
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the doctrine that if the issuance of money were related to short-term financial commercial operations (such as the financing of inventories), there could be no overissuance of money.
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Negative Demand Shocks
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Moves the AD down leftFed ↑ interest rates
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What is an Income Statement?
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Revenue - Expenses = Net Income
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MRS-lc = -20
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substitution of 1 unit leisure for 20 units of consumption
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Factors that influence exports, imports and net exports
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1. The tastes of consumers for domestic and foreign goods
2.The price of goods at home and abroad
3.the exchange rates at which people can use domestic currency to buy foreign currencies
4. the incomes of consumers at home and abroad
5. the cost of transporting goods from country to country
6. Government policies toward international trade
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When ATC (Average Total Cost) decreases: MC ______, AFC _____, and AVC _______.
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MC (Marginal Cost) decreases, then increases, AFC (Average Fixed Cost) decreases and AVC (Average Variable Cost) decreases, then increases.
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What economic problems did farmers experience in the last half of the century?
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despite rising output, income growth was slow - p/c and p/worker growth in income was positive, but <1%. adverse terms of trade.
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cross price elasticity of demand
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measures the effect of the change in one goods price on the quantity demanded of the other good. it is equal to the percent change in the quantity demanded of one good divided by the percent change in the other good's price
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connection between money and pricesquantity equation (is an identity)
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Money supply x Velocity of money = Price Level x Real Output
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The effect of a rise in peoples' income on equilibrium price and quantity of Florida orange juice is
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to increase equilibrium price and quantity
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law of diminishing marginal utility
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the law that for a single consumer the marginal utility of a commodity diminishes for each additional unit of the commodity consumed
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What 2 groups of people suffer from inflation and explain why
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Savers - when people withdrawl their money, it will purchase less than before. Lenders - the money paid back to the lenders will be worth less than before
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In comparing a PC firm to a MC firm1) A PC firm will operate at capacity in the long run, a MC firm won't2) A MC firm will operate @ capacity in the long run, a PC firm will not3) Neither PC nor MC firms will operate @ capacity in the long run4) Both PC a
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1) A PC firm will operate at capacity in the long run, a MC firm won't
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