What shifts the market supply curve?
to wage cuts
2. New Robot
Exercise: What shifts market demand?
Demand inc Curve
1. Price of
beef to rise
2. Millions of
Debt vs. deficits
o Debt: accumulation of past deficits. Its the total
amount the federal government owes at a given time.
(Think for a second at the micro level. If one year
you spent more than your income, youd be running a
Vacuum a room
Wash a load of
What is the difference between comparative advantage and
o Comparative advantage is when someone specializes in
an activity a
What is the difference between real and nominal?
o Real GDP is adjusted for inflation and nominal GDP is
What is not included in GDP?
o Volunteering, improvements in product quality, illegal
What are the determinants shift
1. Aggregate demand curve represents the relationship between
a. GDP and price level
2. An increase in which of the following would result in a
rise in consumption spending?
a. The expected value of lifetime labor income
Circular Flow diagram- what are the components?
o 1) Resource Market: Households sell, businesses buy
o 2) Product Market: Businesses sell, households buy
What is a product market?
o The place where g&s are produced by bus
What is APS?
o Average propensity to save
What is APC?
o Average propensity to consume
What does APC+APS equal?
What is the formula for the multiplier?
Do changes in government spending and taxation have equal
Give examples of intermediate goods.
o (Resources/inputs): flour, milk, eggs to make a cake.
What is the CPI?
o The consumer price index. It measures the cost of a
constant standard of living for a typical consumer.
How is the CPI used?
Comparative Advantage Example
What is the slope of the American production possibility
o -3 cars/computers
o -1/3 (0.33)computers/car
What is the slope of the Japanese production pos