Economics Basics: 1 Exit Ticket

Supply and demand are fundamental forces that influence the price of goods and services in a market economy.
Supply refers to the amount of a good or service that producers are willing to offer at various prices.
Demand represents the amount of a good or service that consumers are willing and able to purchase at different prices.
The interaction of supply and demand determines the equilibrium price and quantity of a good or service.

Land: Includes natural resources, such as minerals, forests, and water.
Labor: Refers to the human effort, skills, and knowledge used in production.
Capital: Consists of manufactured goods used in production, such as machinery, tools, and buildings.
Entrepreneurship: Involves the ability to combine the other factors of production, create new products or services, and take risks in the pursuit of profit.

Traditional Economy: Relies on custom, habit, and tradition to guide economic decisions.
Command Economy: The government controls most economic decisions, determining what is produced, how it is produced, and who receives the goods and services.
Market Economy: Economic decisions are made by individuals and businesses based on supply and demand.
Mixed Economy: Combines elements of both market and command economies, with the government playing a role in regulating the economy and providing certain public goods and services.

Globalization refers to the interconnectedness and interdependence of economies, societies, and cultures worldwide.
It involves cross-border trade, investment, and the flow of people, ideas, and information.
Globalization has both benefits and drawbacks, including increased economic opportunities, technological innovation, and cultural exchange, but also potential concerns regarding income inequality, environmental impacts, and loss of national sovereignty.

Scarcity is the fundamental economic problem that arises because human wants exceed the available resources.
Scarcity forces individuals and societies to make choices about how to allocate limited resources to meet competing needs and wants.
Choices involve trade-offs, meaning that every decision involves sacrificing something else.

Opportunity cost is the value of the best alternative foregone when making a choice.
It represents the cost of choosing one option over another.
Understanding opportunity cost is essential for making rational decisions, as it helps individuals and businesses to weigh the costs and benefits of different options.

Businesses exist to create and sell goods and services in order to make a profit.
Profit is the difference between a business’s revenues and its costs.
Businesses aim to maximize profits by producing and selling goods and services efficiently and effectively.

Societies develop economic systems to address the problem of scarcity.
Economic systems provide a framework for organizing and allocating resources, production, and consumption.
They dictate how individuals and firms interact and make decisions within the economy.

Traditional Economies: Decisions are based on custom and tradition.
Command Economies: The government makes all economic decisions.
Market Economies: Decisions are made by individuals and businesses based on supply and demand.
Mixed Economies: Combine features of both market and command economies.

The U.S. is a mixed economy.
Private ownership of resources and the pursuit of profit are central.
Free markets and competition are encouraged.
However, the government plays a role in regulating the economy, providing public goods and services (such as education and healthcare), and ensuring a basic standard of living for citizens.

Markets provide a platform for buyers and sellers to interact and determine the prices of goods and services.
Prices act as signals to producers about what to produce and to consumers about what to buy.
Prices reflect the relative scarcity and value of goods and services.
The interaction of supply and demand in the market determines the equilibrium price and quantity of goods and services.

GDP Growth Rate: Represents the percentage change in a country's total economic output over a specific period, signifying whether the economy is expanding or contracting.
Inflation Rate: Measures the rate at which the general price level of goods and services in an economy increases over time.
Unemployment Rate: Represents the percentage of the labor force that is unemployed and actively seeking work.
Government Debt: The total amount of money owed by the government to its creditors.
Trade Balance: The difference between a country’s exports and imports.
Investment Levels: The amount of money spent on new capital goods, such as factories, equipment and machinery.
Consumer Confidence: Measures the overall level of optimism or pessimism among consumers about the economy.

Reflects the rate at which prices for goods and services increase.
Impacts purchasing power, eroding it if wages don't keep pace.
Measured using indexes like the Consumer Price Index (CPI) and Producer Price Index (PPI).
High inflation often prompts central banks to raise interest rates.
Low or negative inflation can signal weak economic demand.

Represents the percentage of the workforce actively seeking employment but without jobs.
Categories include:
- Structural Unemployment: Skills don't match job requirements.
- Cyclical Unemployment: Economic downturns lead to job losses.
- Frictional Unemployment: Short-term transitions between jobs.
High unemployment often signifies economic distress and decreased consumer spending.
Low unemployment can indicate a thriving economy but may lead to wage inflation.

Gross Domestic Product (GDP) measures a country's total economic output.
Positive growth indicates a healthy economy, while negative growth often signals a recession.
Factors influencing GDP growth include:
- Consumer spending
- Business investment
- Government spending
- Net exports (exports minus imports)
Annual growth rates are typically expressed as percentages.

Fiscal Policy: Government uses spending and tax policies to influence economic activity.
Monetary Policy: Central banks adjust interest rates and control money supply to regulate inflation and stabilize currency.
Regulatory Policies: Laws and regulations govern business practices and protect consumers.
Economic Stimulus: Measures, like direct payments to citizens, are often implemented during recessions to boost demand.

Indicates the difference between a country's exports and imports.
A positive trade balance (surplus) means exports exceed imports; a negative balance (deficit) means imports exceed exports.
Influenced by factors like currency strength, domestic demand, and local product competitiveness.
Consistent trade deficits can lead to increased debt and impact currency value.
Trade policies and agreements significantly impact the trade balance.