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Economics: Micro and Macro Concepts

Concepts from introductory microeconomics and macroeconomics, in plain wording.

70 cardsGrades 9–12, College#microeconomics#macroeconomics#fiscal policy#monetary policy

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  • MicroeconomicsConcept
    The study of individual consumers, firms and markets
  • MacroeconomicsConcept
    The study of the whole economy: growth, inflation and jobs
  • Marginal analysisConcept
    Weighing the added benefit and added cost of one more unit
  • Marginal costConcept
    The extra cost of producing one more unit
  • Marginal benefitConcept
    The extra satisfaction from one more unit
  • Diminishing returnsConcept
    Adding more of one input eventually adds less output
  • Economies of scaleConcept
    Average costs fall as output grows
  • Price elasticity of demandConcept
    How much quantity demanded changes when price changes
  • Elastic demandConcept
    Buyers respond strongly to price changes
  • Inelastic demandConcept
    Buyers respond little to price changes, like necessities
  • Substitute goodsConcept
    Goods that can replace each other, like butter and margarine
  • Complementary goodsConcept
    Goods used together, like printers and ink
  • Normal goodConcept
    A good you buy more of when income rises
  • Inferior goodConcept
    A good you buy less of when income rises
  • Determinants of demandConcept
    Income, tastes, prices of related goods, expectations and number of buyers
  • Determinants of supplyConcept
    Input costs, technology, taxes and number of sellers
  • Price ceilingConcept
    A legal maximum price
  • Price floorConcept
    A legal minimum price, like a minimum wage
  • Deadweight lossConcept
    Lost value when a market does not trade at the efficient level
  • Consumer surplusConcept
    The difference between what buyers would pay and what they do pay
  • Producer surplusConcept
    The difference between the price received and the lowest price a seller would accept
  • Perfect competitionConcept
    Many sellers, identical products and no control over price
  • OligopolyConcept
    A market with a few large firms
  • Monopolistic competitionConcept
    Many firms with differentiated products
  • Natural monopolyConcept
    An industry where one firm can serve the market at the lowest cost
  • Antitrust lawConcept
    Laws that promote competition and limit monopolies
  • Public goodConcept
    Non-excludable and non-rival, like national defense
  • Free riderConcept
    A person who benefits from a good without paying for it
  • ExternalityConcept
    A cost or benefit that affects people who are not part of a transaction
  • Gross domestic productConcept
    Total market value of goods and services produced in a country in a year
  • Real GDPConcept
    GDP adjusted for inflation
  • Economic growthConcept
    Increase in real GDP over time
  • Business cycleConcept
    Recurring phases of expansion, peak, contraction and trough
  • RecessionConcept
    A significant decline in economic activity
  • Unemployment rateConcept
    Percent of the labor force without a job but looking for one
  • Frictional unemploymentConcept
    Short-term joblessness while changing jobs
  • Structural unemploymentConcept
    Job loss because skills do not match available jobs
  • Cyclical unemploymentConcept
    Job loss caused by an economic downturn
  • InflationConcept
    A general rise in the price level
  • Consumer Price IndexConcept
    A measure of the average change in prices consumers pay
  • Fiscal policyConcept
    Government spending and taxation to influence the economy
  • Monetary policyConcept
    Central bank actions that influence interest rates and money supply
  • Federal ReserveConcept
    The US central bank, created in 1913
  • Federal funds rateConcept
    The interest rate banks charge each other overnight, a key policy tool
  • StimulusConcept
    Government action to boost the economy
  • Budget deficitConcept
    When spending exceeds revenue in a year
  • National debtConcept
    The total of past deficits the government owes
  • Progressive taxConcept
    Higher earners pay a higher percentage
  • Regressive taxConcept
    Lower earners pay a larger share of income
  • Aggregate demandConcept
    Total demand for all goods and services in an economy
  • Aggregate supplyConcept
    Total goods and services producers will supply
  • Multiplier effectConcept
    An initial spending change leads to larger changes in income
  • Comparative advantageConcept
    Producing something at a lower opportunity cost than others
  • Absolute advantageConcept
    Producing more of something with the same resources
  • Trade deficitConcept
    Imports exceed exports
  • Exchange rateConcept
    The price of one currency in terms of another
  • World Trade OrganizationConcept
    International body that sets rules for trade
  • Gold standardConcept
    Money tied to a fixed amount of gold
  • Adam SmithConcept
    Author of The Wealth of Nations (1776), who described the 'invisible hand' of markets
  • Invisible handConcept
    Smith's idea that self-interested trading can benefit society
  • John Maynard KeynesConcept
    Economist who argued governments should spend to fight depressions
  • Milton FriedmanConcept
    Economist who stressed the money supply and free markets
  • Karl MarxConcept
    Writer who criticized capitalism and wrote Das Kapital
  • Human capitalConcept
    Skills and knowledge workers have
  • Labor forceConcept
    People working or looking for work
  • Minimum wageConcept
    Lowest hourly pay allowed by law
  • Labor unionConcept
    Workers' group that bargains for pay and conditions
  • Productivity growthConcept
    Rising output per worker, which raises living standards
  • Gig economyConcept
    Short-term, flexible work done through apps and platforms
  • Supply chainConcept
    The steps that move a product from raw materials to customers

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