CHAPTER ONE: TEN PRINCIPLES OF ECONOMICS 1. People face tradeoffs. 2. The cost of something is what you must sacrifice. 3. Rational people use marginal analysis. 4. People respond to incentives. 5. Trade can make everyone better off. 6. Markets are usuall
SCARCITY If a good is scarce relative to the desire to own it or use it, choices must be made. This is true even if no shortage exists. _ are scarce goods for which the desire to own or use them exceeds their availability at a price of zero. Some examples
ECON2105_Ch7 CHAPTER 7: PRODUCTION AND GROWTH Lets begin with some definitions: 1. Per Capita Income 2. Per Capita GDP 3. Growth Rate of GDP
where we multiply the expression in brackets by _ to express the growth rate as a percentage Examples 1. Real GDP
PRICE LEVELS Many goods and services are produced in the U.S. economy. Prices of these goods and services may increase, decrease, or stay the same. _ allow us to monitor general trends in the prices of most goods and services. They allow us to monitor the
CHAPTER FIVE: NATIONAL INCOME ACCOUNTING SIMPLE CIRCULAR FLOW DIAGRAM Shows important relationships in an economy. In what two markets do firms and households interact in an economy? Draw a Simple Circular Flow Diagram. Be sure to accurately label all par
CHAPTER 3 NOTES, ECON 2105, Harrison Hartman, Fall 2003, 8 am and 2 pm _ Advantage occurs when one county can produce more of all types of goods than another country can produce _ Advantage occurs when one county can produce a good at a lower opportunity
EXTRA PRACTICE PROBLEMS ON THE MULTIPLE EXPANSION OF CREDIT 1. Suppose the Fed buys $5 million of government bonds from Bank A. If Bank A lends the maximum amount allowed, what will be the impact on the balance sheet or the T-Account of Bank A?