IM study guide - IM Notes/ Study Guide Economics- How a...

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IM Notes/ Study Guide Economics - How a society chooses to use resources to produce goods/services for distribution to competing groups and individuals A. Macroeconomics- study of nation as a whole B. Microeconomics- study of a specific unit, smaller than macro C. Market price is the same as equilibrium price 4 economic questions 1. what 2. how much 3. distributed 4. rate of growth Capitalism - supply and demand based Mixed economy - supply and demand based plus more government involvement/regulation Socialism - more government involvement Communism - complete government involvement Productivity - Producing more without working more Monetary Policy - Governments efforts to manage the money supply - Loose Monetary Policy- putting more money in, raise inflation - Tight Monetary Policy- taking money out , lower inflation Fiscal Policy - Raises and lowers taxes, government spending Rights of capitalism - Keep profits - Freedom of choice - Private property - Freedom of competition Limits of free-markets - Inequality of wealth – causes tension - Greed compromises ethics - Environmental damage - Socialism = government regulation Economic Indicators - Gross Domestic Product(GDP) = value of final output of goods and services made in our country - Unemployment Rate - Price Indexes o Consumer Price Index (CPI)- Everything a consumer must buy in the monthly cycle o Producer Price Index(PPI)- Consumers high prices passes the high prices onto its consumers
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Types of unemployment - Frictional - caused by workers seeking new jobs or newbie’s into the labor force - Structural - mismatch between the skills or location of a job - Cyclical - caused by a downturn in the bus. Cycle - Seasonal - demand for labor varies over the year - Inflation - general rise in price - Cost-Push - Cost to make product is higher which makes prices higher to the consumer - Demand-Pull - The demand is so high it is pushing the price up Trade Agreements - General agreement on tariffs and trade (1948) - Uruguay round of GATT (1986) o Lower tariffs o Extend rules - World Trade Organization - Common Markets o Countries agreeing on things in order to trade (European Union)
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This note was uploaded on 04/17/2008 for the course INFO MAN 121 taught by Professor Conway during the Spring '08 term at Western Illinois University.

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IM study guide - IM Notes/ Study Guide Economics- How a...

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