CLEP Macro Economics

When tapes are priced at 5 point e the demand is 2

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When tapes are priced at $5 (point e) the demand is 2 million per week but when tapes drop to $2 (point b) demand increases to 6 million per week Liquidity – the ease at which an asset can be converted into cash Example: Bonds are liquid assets, they can be converted to cash value
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Macroeconomics – is the branch of economics that deals with the structure, performance and behavior of national economies as a whole (also regional) Are concerned with government policies to curb inflation Are concerned how the entire economic system works Microeconomics – is the study of how households, individual economic units and individual markets interact with each other in the market Combination of this data is Aggregation Study of individuals, individual firms and economic entitles Economic Growth – is the process of steady increase in the quality and amount of goods and services a nation can produce As nations produce more, they consume more, and economic growth results Standard of Living- the degree people have goods and services to make their lives better Labor Productivity – value of output per unit of labor input When a nation produces more it consumes more Aggregation – adding up individual economic variables to obtain a large general picture of the economy Macroeconomists analyze data from individual professions to get a overall employment picture Aggregate Demand (AD) – total demand for goods and services within an economy Includes demand for consumption, investment, government purchases, and net exports o Factors that cause the AD to shift Changes in government spending, consumer confidence, business sales projections, foreigners’ preference for imports, money supply, and taxes Opportunity Cost – benefits missed by choosing another option Business Cycle – record of economic increases and decreases over time Relies on nations GDP measures and is made up of expansions, booms, recessions, and depressions Capitalism – system of private ownership of resources and the use of free markets and prices to determine economic activity Each participant is motivated by their own interests and market functions as a mechanism thru which individual choice is communicated and coordinated Economic power is widely dispersed because there are many providers of goods and services Providers operate under competitive conditions and quanty and price are determined based on utility of each good or service Resource use, economic output and employment are determined by market conditions Very little government involvement free market system that relies on the private property ownership, and supply and demand System where wealth, the means of producing wealth are privately owned Laissez-faire – refers to little government involvement “let it be” Government disturbs the efficient production and use of resources Government’s role is restricted to protect private property, so owners of resources have the ability to exploit them, and providing a legal framework in which the free market can function effectively
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When tapes are priced at 5 point e the demand is 2 million...

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