9-26-07 - QD movements along demand curve Determine Market...

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ΔQD – movements along demand curve Determine Market Supply: Factor Costs Technology Other Goods Taxes and Subsidies Number of Sellers Weather Equilibrium Price – price at which quantity of good demanded in given time period equals quantity supplied Market Clearing Everyone not happy with price/quantity at equilibrium Unique outcome at market equilibrium is efficient Invisible Hand – way in which prices signal to have a change in supply/demand 9-8-07 Today: Federal Reserve meets expect to raise interest rates About 1 and ½ year lag between actions of Federal Reserve and their impact. OPEC – organization of petroleum exporting countries meet in Geneva and decide on an oil price Substitutes always move in same direction! Microeconomics Price Theory Pi Water Diamond Paradox National Economy – aggregate product Products = Outputs 1. Services 2. Goods Inflation – increase in consumer price index 10+ Hyperinflation Equilibrium Price
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Deflation – decrease in price level/decrease in consumer price index Inflation higher than expected = prices are going up more than expected. GNP – National GDP – Domestic Two consecutive quarters of negative growth = recession. GNI – Dollar value of everything produced. Demand – cost inflation
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9-26-07 - QD movements along demand curve Determine Market...

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