REVIEW TOPICS FOR THIRD EXAM

REVIEW TOPICS FOR THIRD EXAM - price of goods and services...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
REVIEW TOPICS FOR THIRD EXAM Chapter 9 Market failure – wrong mix of output, externalities, uneven distribution of output Causes of market failure – public goods and free rider problem, externalities, market power, inequity Government failure – when government policies don’t have desired effect or outcome Social demand versus market demand Chapter 10 3 measures of the macro-economy – Real GDP, unemployment, inflation What is the business cycle? What is included in GDP? Value of all of the goods and services produced within a country’s border regardless of who owns the company. Unemployment rate = # unemployed people / size of the labor force Labor force – anyone over the age of 16 who is either employed or actively seeking employment 4 types of employment – seasonal, frictional, structural, cyclical Inflation – an increase in the average
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: price of goods and services Deflation -- a decrease in the average price of goods and services Average price versus relative price Effects of inflation price effect, income effect, wealth effect Consumer Price Index (CPI) Chapter 11 3 macro determinants internal market forces, external forces, government policy Classical theory economy inherently stable; economy self-adjusts through flexible prices and wages; laissez faire Keynesian theory economy is inherently unstable and the economy will not self-adjust when in disequilibrium; Government intervention is necessary Aggregate demand sum of all market demand curves; total output of the entire economy; GDP Aggregate supply sum of all market supply curves Result of disequilibrium unemployment and inflation...
View Full Document

This note was uploaded on 02/13/2012 for the course ECON 224 taught by Professor Ozturk during the Spring '09 term at South Carolina.

Page1 / 2

REVIEW TOPICS FOR THIRD EXAM - price of goods and services...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online