FLASHCARD 1 - Intro to macroeconomics, supply & demand, schools of thought, and economic systems

Front

This is a concept that encourages equilibrium with the natural function of the free market without much guidance.

Back

The invisible hand

Front

At [_______], wages are set at an amount that creates a sufficient labour force in order to create the supply of goods that society is currently demanding at the prices set that offer businesses and services an acceptable ROI.

Back

equilibrium

Front

In the normal working process of supply and demand, if labour and wages stay the same and demand increases, what do you expect to happen to PRICE and SUPPLY?

Back

Price increases, supply decreases

Front

The introduction of competition has the BIGGEST impact on what market factor? Supply, Demand, Price, Labour

Back

Price

Front

Confusion from consumers and changes in ROI when prices are changed too often is a result of what?

Back

Menu costs

Front

Since spending on domestic goods and services as well as export expenditures contributes to aggregate demand, spending on international imports does what to aggregate demand?

Back

Subtracts from aggregate demand

Front

When output meets potential GDP, this indicates that what type of unemployment is at zero?

Back

Cyclical unemployment

Front

What is measured by calculating the total income from the sale of all goods and services?

Back

Output

Front

What occurs when an economy grows too quickly, and what occurs when an economy declines over a period of time? Options: Deflation; inflation, Deflation; deflation, Inflation; inflation, Inflation; deflation

Back

Inflation; deflation

Front

[THIS] policy is controlled by the Federal Reserve or Central Bank, whereas [THIS] policy is controlled by the government.

Back

Monetary; fiscal