NOTES - NOTES On the PPF Curve as you move down you...

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- On the PPF Curve as you move down you experience a greater opportunity cost. Therefore, the slope of the curve is negative but increasing. - Capital goods are used to make more capital. - Consumer goods are for PRESENT satisfaction and consumption - Econometrics- statistics and math to measure variables. The application of statistical methods to the empirical estimation of economic relationships. Econometric analysis is used extensively in international economics to estimate the causes and effects of international trade, exchange rates, and international capital movements. - Economics- HOUSEHOLD LAWS, everything around households Ceteris Paribus- one thing at a time, everything is isolated, everything else held constant Representative Agent- “average joe” Post Hoc- A before B, no causation People do business the same way, CONCRETE Actions, social science and math factors Economic Growth- the percentage increase in Y (real output) , total productions of economy. The increase over time in the capacity of an economy to produce goods and services and (ideally) to improve the well-being of its citizens *Growth is dependant on new innovations, one-sided economic growth is more common. Fallacy of Composition- what is true for the whole is not always true for the part. Interest Rate- price to borrow money. The rate of return on bonds, loans, or deposits. Variables: 1) Real Output = Y 2) Unemployment Rate= U 3) Inflation Rate= pie 4) The Real Interest Rate= R 5) The exchange rate= (E) The price at which one country's currency trades for another, typically on the exchange market . Real variables are transformed into quantities, they are ADJUSTED for inflation, etc. TRANSFORMATION:
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This note was uploaded on 03/30/2008 for the course ECON 201 taught by Professor Staff during the Spring '08 term at N.C. State.

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NOTES - NOTES On the PPF Curve as you move down you...

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