Podcast
Questions and Answers
What term is used in macroeconomics to describe the total supply and the total demand?
What term is used in macroeconomics to describe the total supply and the total demand?
aggregate
Which terms can be used to describe David, who lost his job due to decreased production?
Which terms can be used to describe David, who lost his job due to decreased production?
Describe the circular flow model.
Describe the circular flow model.
The model represents the movement of money throughout the economy.
What is the difference between inflation and deflation?
What is the difference between inflation and deflation?
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How do consumers' feelings about the economy help contribute to growth?
How do consumers' feelings about the economy help contribute to growth?
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What decisions does the business cycle help businesses make? (Select all that apply)
What decisions does the business cycle help businesses make? (Select all that apply)
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The exchange of factors of production for income occurs in the?
The exchange of factors of production for income occurs in the?
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What is the name of the period when an economy begins to shrink?
What is the name of the period when an economy begins to shrink?
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Does a depression always follow a recession?
Does a depression always follow a recession?
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What are the signs of low inflation?
What are the signs of low inflation?
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Cost-push inflation occurs when?
Cost-push inflation occurs when?
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The most common measure of inflation is a statistic called the?
The most common measure of inflation is a statistic called the?
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Study Notes
Aggregate Supply and Demand
- The term "aggregate" describes total supply and total demand in macroeconomics.
Types of Unemployment
- Cyclical unemployment refers to job loss due to decreased production, as seen with individuals like David, who lost his car design job.
Circular Flow Model
- Represents the flow of money within the economy, illustrating how goods, services, and income circulate.
Inflation vs. Deflation
- Inflation is driven by rising demand, decreasing money value.
- Deflation occurs from falling demand, increasing money value.
Consumer Sentiment and Economic Growth
- Positive consumer attitudes enhance spending habits, stimulating economic growth.
Business Cycle Decisions
- Businesses use the business cycle to determine:
- To expand or reduce operations
- To increase or decrease production levels
- To hire additional staff or implement layoffs
- To invest in growth or prioritize savings
Factor Market
- The exchange of production factors for income takes place in the factor market, linking labor and capital with earnings.
Recession
- A recession marks a period when the economy begins to shrink, characterized by reduced economic activity.
Relationship Between Recession and Depression
- A depression follows a recession only if the latter is unusually prolonged. A depression implies a severe and lasting economic downturn.
Signs of Low Inflation
- Indicators include:
- Steady rise in demand
- Continuous price increases
- Healthy economic growth
Cost-Push Inflation
- Occurs when producers face rising costs for making and distributing goods, necessitating higher prices.
Consumer Price Index
- The most common measure of inflation is the consumer price index (CPI), tracking changes in price levels over time.
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Description
Prepare for your Unit 5 Test in Economics and Finance with these flashcards. This review covers key terms such as aggregate supply and demand, types of unemployment, and the circular flow model, ensuring you have a solid understanding of macroeconomic concepts.
