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AP MACRO
Term | Definition |
---|---|
Economics | Social science; study of scarcity and choice to achieve max satisfaction of human economic want |
4 resources of economics | labor, land, capital, entrepreneurship |
capital | all manufactured goods used to make other goods |
entrepreneurship | risk taking, innovation, organization of resources for production |
wants | limitless/varied |
needs | clean air, water, food, clothing, shelter |
scarcity requires ________ | a choice to make |
Choice implies _________ | opportunity cost |
opportunity cost | sacrifices; the real cost is what you have to give up |
macroeconomics | whole economy overall; focuses on economic aggregates |
microeconomics | individual parts of economy |
positive economic analysis | "what is" no value judgements; statement of facts |
normative economic analysis | what should work; "right" "wrong" "best" |
business cycle | the alternation between economic downturns and upturns in macroeconomy |
peak | when business activity reaches temporary maximum |
recession | decline in total output, income, employment (6mo +) |
trough | bottom of recession period |
recovery | output and employment expanding |
how do we know current position in business cycle? | employment, unemployment, GDP (gross domestic product) |
population divided into 3 groups | people under 16, labor force, "those not in labor force" |
employed persons | any work for pay/profit during survey week, all who did 15 hours minimum unpaid in family business, temporary absent |
unemployed | don't have a job but actively looking for work |
aggregate output | economy's total production of goods and services for given time periods |
inflation | rise in overall price level; food and gas not included |
deflation | fall in overall price level |
expansion phase | the economy is going up and getting better |