*********** ******** *********

Explain

***

*******

**********

********* *** unlimited ***** ****** in ******** *********** costs *** ***** **** for *********** ********** *** governments
***** are ********* the

*****

********* of a society ********* ******* ********* ***** ********* ******* goods *** **************** *** ******* resulting ** ******** *** ***** ****** be ****** ********** *** ********** **** ******** what ** ******** ****** ******** ** a basic

condition

which

******

****

unlimited

*****

******

******* ********** ********** ******** ****** ******* ***** ***** ****** *** capacity ** available ********* ****

basic

*******

of

scarcity

is

***** by all individuals ************* businesses and ************ ****** *** **** ******** ** productive ********* ******** of *********** ** **** ********* ***** (human) capital ********

******

*****************

****

=

natural

**********

*****

* ****** with ***** ********* skills *** abilities;
Capital * *** ***** *** ******** **** to **** other ********

goods

***

**********

*************

*

*********** *** **** *** ****

and ******* *** productive ********* (factors of *********** to

******* goods and ******** and ****** ** ******* these ** consumers Identify strategies ***

********** ****** resources
*** Chart The ********* ********** include ***** ******** force sharing ******* command *** **** 1st ****** ******** **************** ****** *********** **** ** *** **** ****

***********

*****

up

****

***********

businesses

***

governments confront ******** ** ****** ********

***********

cost

**

what

you

**** ** ** ****** ********* **** *** **** ** service *** another *********** often have ** ****** on

one

****

or

*******

at

***

*******

** ******* ********* ** ****** ** *** ******* ** ********* in ***** ** **** ******* one that *** ** *******

*******

********

**

***

********

******** ****** ******* ********* the marginal ******** *** *** ******** ***** ** ** ******* ** **** choices to satisfy ***** ** to seek ********** ** look ** *** ******* ******* ***** benefits *** *** ********** involved **** each ****** *** reach * ******** Marginal **** * *** ********** **** **

*********

one

****

*****

********

*******

*

the

additional

satisfaction

**

utility ** ********* *** **** unit
********** by means of * ********** possibilities ***** the ********** ******* *** ********

**********

Possibilities

*****

*

*****

** ***** that ***** *** **** ********** ******** ** ** ******* ** *** **** of ******** combinations of *** ***** ** *** ******* ** ***** **** ***** ** ******** ****

* given ****** of ********** resources and ***** ** ********** ******

from ***** * ** * ********* **** **** ******* *** prefers ** build

****

********

*****

and

****

capital ***** **** ** the trade-off when choosing * ********* *********** ** goods

*******

****

rational

*********

occur

**** the ******** benefits

**

an

****** equal or ****** *** marginal costs
******** ********* *** **** ** the basis ** comparing marginal ***** and ******** ******** ***** *** *** **** *** ** none ********* ****** *** decisions are ******** ** *********** typically **** * ******** ******* studying all

***

**

watching

TV

***

day

**

choose

*******

********

*

******

****

***

********

*

******

****

**

**

****

versa

Explain

***

specialization

***

*********

********

*******

buyers

and

*******

******** *** ************ ** both ******* ******* ******** ** *** individuals and businesses specialize
Division of Labor ****** ** the ******** ** ******** *** **** ** **** something **** ******** tasks *******

******

***********

**

*********

*****

** **** * ****** ** doing tasks taking *** wages to ******** ***** and ******** **** ***** *******

********

of

Labor

***

**************

** the ***** *** an ******* ** ***** * ******** *** ***** ** ****** ** **** ******** ** switch tasks ****** **** ********* **** ** do *** ***** ******* **** **** ******* **** ** * ****** of ********* non-fraudulent ********* We don’t **** *** ** *** ********** ******* ********* ** *** make all of the ***** *** ******** ****

need

Specialization

is

the

*****

of

*****

***

***************

*****

***********

businesses

******

regions

***

********* ********* = ***** ******* * ******** ******* *** ******** ********* ******** ******* *** ******* *** **** ****** the ***** ***** ******** ********* of

what

to

*******

***

to

produce *** for **** ** produce
Every ******* **** contend with the ******* of ******** ***** ******* regardless ** *** political structure must ******* ** ******** ****** ** ********* *** ** *** *** limited productive ********* to answer *** three ***** economic ********** What ***** *** ******** **** ** ********** How will goods and ******** be ********** *** **** consume *** ***** *** services?
*** *** * ******* answers ***** ********* ********** its economic

*******

Three

*****

**

********

******* ***** ** ****** these ********** Traditional – ** * traditional economy

********

decisions

***

based

**

****** and ********** ********** ******* ******* In * centralized command ******* ********** ******** ****** **** *** ***** ******** ********* They ********* **** things as which goods *** ******** ** ******* ***** ****** *** wage ****** Market ******* In a ************* ******

*******

economic

*********

***

******

** *** ******* in ****** **** occur ** ********** buyers and ******* interact ** *** market ***** ****** it ** **** ******** ** ** * price ******* *****

*****

***

******

*******

***

free ********** capitalism *** ************** ******* ******* ****** and mixed ******** ******* with ****** to ******* ********* ****** ****** ******** *********** *********** government *********** ******** ******* are characterized ** *** **** ****** *** ***** basic ******** **********

*******

*************

Economy * *** ****** ** production and

************

*** resolved ******* ******* ******** *** ********

******

*************** ******* * ****** ****** *** **********

by

consumers *** producers *** ******** ***** *** self-interest ***** ******* *

*****

***

**

****

****** ** ******* ********* most economies ***** ******* **** *******

***

******

**************** ****** Motive * the desire ** **** ***** ****** ****** ** **** hard **

produce

goods *** ********* Consumer Sovereignty * ****** *** **** ** ****** ******* ********** interference ** regulation
*********** – ********* ******* **** other consumers *** ***** *** services producers ******* **** other

*********

*** ********** ************ Regulation – the ********** intervention ** the ********* ** ******** *** ********* ** the market Evaluate how **** **** **** ** ****** ******* *** ***** economic ********* *** ***** the ***** ****** and ******** ***** ** ******* ******** equity ****** ********** *** stability
Economic ******* –

*******

of

******

**

********* *** ********** ******** Security – ********** ******* **** risks as ********* *** producers
******** ****** * Fairness? *****

**

******

Equal

************

Equal

distribution of wealth *** ******** ******** ****** * an ******** ** the **********

**

***** *** ******** **** **** measured by real GDP 3 ** * % ** a ********** and

sustainable

******

******

*****

********

**********

*

********** ** ********* so **** ** one ** **** ** *** ******* ** someone **** ******* ***** costs

to

produce

Economic

*********

–

******** ****** ****** **** ********** and ******** ******* ******** *** ***** of ********** ** * ****** ******** ********** establishes ***

*****

of

the

****

***********

******** ** the ****** ****** ***** *********** as a business ********* defense) environmental ******** monetary system
******* ***

government

provides

******

goods

and

services ************* ****** protects ******** ****** *** ******** market ********* ****** Goods ***

********

*

*****

*****

***

******** **** cannot ** easily ** restricted to ***** who pay for **** ****** *********** *** ************* *********

what

*

******

****

***

****** ************** – *** ************* of wealth *** income ****** ** ******** ****** ** wages ******** ******

*******

*****

ownership

of

*********

****************** **** ** to ******* ******** rights ****** ******** ******* private ****** ** military ********* *********** ** the ****** ********* ****** ******* ******** of government ********** *** ************

***

*****

*******

on

*********

*** ********** Comparing the ******** ***** ** * *** ******

**

*

change

**

**

******** policy ** *** ******** ********* ******* *** ************ ******** ******

***

******

*********

**

******

*** ********** by ********** in ********* ********* *** ********** and *** ****** ********* *** training

**

*******

******

************

**

the ************ of ****** to outputs
*** ******** ** output *** **** ** ***** ** ******** in ************ *** ** **** goods and ******** created **** *** **** amount **

*********

**

***

****

******

** ***** *** services with less resources More productive ******* lead to * ****** standard ** living
******* ************* ** ********** in *********

***

**********

***

explain

*****

************ ** economic growth
************ ** ********* experience ***** level of

***

*********

******

********

*******

******* ** ******** ******* improved technology
******* ******** **

how

**********

in

education

***

**** ** * ****** ******** ** ******* **** investments in ********* ******** *** ***** ******* ****** higher productivity low ********* political ********* *** free

******

Microeconomic

*********

Describe

***

households

**********

*** *********** *** ************** *** ******** ******* ***** of ***** ******** *** ***** Illustrate ** means **

*

******** **** ******* *** ******* ******* *** ******** ******** ******* *** **** **** ** ***** *** ******** ******* *** among ********** ********** and *********** *** *** flow ** ****** b Explain

***

****

**

*****

**

a

******

of ******** and *** ** facilitates exchange
Money ******* anything used ** buy and **** *****

***

********

*

*********

**

money:
****** ** exchange – ********* accepted ** * form ** payment
Store of *****

*******

retains

value

over

*****

Unit ** ******* ******* ***** ** ******** in ***** ** ***** Explain *** the

Law

of

******

the

Law

** Supply prices *** ******* work ** ********* ********** *** distribution ** * ******

********

******

***

***

**

Supply and *** *** of Demand
Law ** Supply ******* all ***** ******* ***** equal ** the ***** of

*

****

**

*******

increases

***

quantity

** goods and ******** ******* by suppliers ********* *** vice ****** Law ** ****** ******* *** ***** ******* ***** ***** ** *** ***** ** a good **

*******

*********

***

**********

consumers

******

***

***

****

**

service

**** ******** *** **** versa
Describe *** **** of

******

***

*******

**

***********

****** clearing ****** *** ****** ******** ***** (equilibrium) results ** neither ********* or ********* ************ ** * market ******* *** ********* so **** **** ******* **** ****** *** ******** * Illustrate ** a ***** *** supply and ****** determine *********** ***** and ********* ****** Equilibrium
*

*******

how

******

*****

**

********** ** * ****** ******** * The ***** *** ******** ********* *** ********** ** supply

***

demand

prices

*******

**********

*** **** ****** and sellers ****** ******* information ** ********* *** ********* ***** ****** ********** ** ****** ***

demand

Explain

***

markets

******

*** competition ********* ******** behavior
******** *** ********** ** * ***** ******* **** cause changes

**

market

******

and

*******

Factors **** ***** ******* in market ****** ******* ******* *** they ****** supply
**** ** ******* ************* Technology

Taxes

and

**********

*************

********** ************

******

in

***

number

** ******** *************** disasters
Price Price
******** in ****** ******** ** Supply
******* **** ***** ******* in ******

******

*******

*******

how

****

****** ******* ******** ************** Consumer ****** *** preferences (advertising)
****** in *** ***** ** ********** goods
****** ** the price ** ************* ****** Change ** expectations
****** in ****** of ********** Price Price
Increase

**

******

********

**

*******

*

*******

and

**********

**

a

*****

***

price

******

******

*********

***

price

********

******

**********

*****

*****

*

*

legally

established

*******

priced

*******

examples

***

****

********

***

*******

****

**** *** much milk produced too **** workers ******* a ****** ******* **** Designed ** help

*********

**** will not ** **** ** **** their ***** because ** lack ** demand
*****

*******

******* legally *********** ******* ***** an ******* ***** ** rent *******

***

**** ******* *** ****** ********** Designed ** ****

consumers

*** ******** ******** ***** to exceed the quantity ******** * ****** *****

**********

**

******

***

supply
***** ********** ** ****** ******* * *** of measuring how **** quantity demanded will ****** ** ******** ** * change ** price

Price

elasticity ** ****** – * *** ** measuring how much

********

******** will change in response ** ****** in price
Explain *** ************ *** role ** ******** *** analyze *** four types ** ****** ********** in *** US ******** ******* *** ********

***** forms of ******** *********************** ************** *********** and ************ Sole ************** ******* * business ***** ** *** ******* *********** **** of start-up ease ** management ***** **** all profits full ******* ****

**

****

business

******

**

******

from

tax

on

******* ************** unlimited ********* difficulty ** ******* ********* ******* amount ** ****

limited

*****

*********** ******* a business ******* ***** ** *** ** **** people
Advantages- ease ** ******** **** partner ****** * ***** ****** **** of capital **** of

*******

taxes

on

*************

**************

each

******* ** *********** *** the ******** ********* ********* ******* *** ** ******* liability ************

*******

****

*********

***

*********

***********

*******

*

********

************

****

** *****

by

*****

*******

***

recognized

**

***

**

a

********

legal

******

******

***

***

******

**

** *********** *********** ease ** ******* ********* ******* **** *** ****

of

stock or bonds ******* ********* ** ****** unlimited **** **** ** ************ ownership
Disadvantages- ********* ** ***** ******************* often have little or ** ***** ** run *** *********** **** ***** ************ ****** taxation *

Explain

***

role

**

profit

**

an incentive *** ************** Entrepreneurs *** ******* to ****

***** resources in ***** ** **** **** *** ********* **** ** ****** and *** **********

when

providing

*****

and

services

******

**

********* ********** ************* *** ******* ** assume risk have ****** ****** ********** **

work

****

and

hard to ****

******

*****

****** ****** **

******

******** ***

***** *************** of ******** ********* ************

*********** ***

****

************

********

*******

* market

structure

**

*****

there

**

a

******

supplier

**

a

****

or

*******

****

*****

**

**

close

**********

***

*******

*******

******

******

*********

*******

*

market ********* in ***** * ***

relatively

*****

*****

*******

***

all

or

****

**

***

production ** **** of * good ** service ** * ****** barriers to

***

producers

***

**** Examples

are **** ******** *** *****

******** Monopolistic *********** – * market structure

***** slightly different ******** are **** **

* large ******

** ********** small ********* barriers

**

***

*****

are

*** **

example

would

**

*****

and

***

stations

Pure

***********

*******

*

******

*********

******

**

*****

*

large

******

**

relatively

*****

firms

*******

***

**** ********* products ***** *** **

********

**

*****

*** market and ** is **** ** exit from *** ****** *** **** ******* would ** ************

products

**** ****** ************* ********* Illustrate *** ***** ** ***** ******** ******** is ******** Explain that overall levels of income ********** and ****** *** ********** ** the spending *** ********** ********* of households ********** ********** and net exports
Define ***** ** ******** ******* (GDP) ******** growth ************ ********

Price

Index

(CPI)

inflation

***********

and

aggregate

******

***

aggregate

*******

*****

********

Product

*****

*******

the

******

*****

**

all

***** *** services ******** in * ******** year
Economic ****** – ** ******** ** **** ****** ** measured ** real GDP or *** ****** **** *** ************ ******* *** number ** ****** **

the

********

*********

over

***

***

**

16

without

****

***

***

********

seeking

*****

********

*****

*****

*****

*******

a

price ***** **** ******** the cost of *

*****

basket ** ******** ***** *** services ******** *** costs from other **** periods and ** **** to measure ********** Inflation ******* *

****

**

***

******* or average price level of *** ***** *** services ** ** ******* ******* ** *********** ** *********** Stagflation * *

*******

**

****

***

combined **** * **** in the ******* ***** ****** Aggregate ****** **** ******* *** value ** ****** ***** ****

that

*****

be

********

**

********* ***** ****** ** * ************** economy
**** Aggregate Demand **** –

***

***** ** output ***** GDP) **** ***** ** demanded

**

*********

*****

******

**

a ************** economy
******* *** economic ****** ********* *** ************ *** *********** Economic growth ** ******** ** *** Inflation ** ******** ** *** the

******* ** 50000 households ** ****** ** ************ **** ****** ********** ******* by

the

total

***********

Bureau

**

******** Analysis- wwwbeagov ********* growth)
****** of ***** Statistics- ********* **********

**************

********

structural

******** and ********** ************* ********** ************ ******* ****** ** ******* ** not ***** ** **** *** ****** ******** **

********** ******** Unemployment ******* caused ** *** fluctuations ** the overall **** ** economic ******** ** * ***** in *** ********

******

**********

************

–

****

***

******

**********

*****

** ** *** ****** of *** ****** *** * variety ** ******** ****** *** ****** ** *** ******** ***** include **** *********** ****** recovery ********* as ****

as

*********

***

*********** ******** ***** – ******* ** the ******* **** ** ******** ******** ******** with *********** periods of expansion *** *********** ******* ** ********

and ******** *** ******** ** **** **** **** ******* *** ****** ** ******** expansion **** *** ***** rising
Contraction – *

******

**

********

Decline

****** ** ******* *** ****** ******* *** lowest ***** in **

********

*********** real GDP
***** falling
******** – *** period ********* * ********* during ***** ***** *** ****** ********* ******* * ****** of ******** ******* as ******** by * **** in real *** Recession ******* * ******* ** ******** economic ******** ******** by a decline in **** GDP *** ** ***** *** consecutive quarters

**

********

**********

*******

* ****** *** ********* economic contraction
Describe the ********** ******* *** ********

****

*** ********** ********* National **** ******* *** ****** **** *** ** the annual ******* ******** ***** ********* ********** Deficits ******* *** government spends **** ***** ************** ** *

******

****

****

it

*****

**

(revenue)

****** that time
******* *** **** *** functions ** *** Federal ******* ****** ******** *** organization ** *** ******* ******* ******* ******** Board ** ********* FOMC ** ******** ****** ****** ******** ******* ******** ****** ******* changes ** *** ***** supply availability *** ****

of

******

set

**

***

*** ** ******* ******** growth ***** ********* and **** *********** ******** *** *** Federal ******* **** *** ***** of ******** policy ** ******* ***** ********* **** ********** *** ******** ******* **** ****** ********** ******* the

******

***

*******

**

government

********** (T-bonds ******** T-bills) ** *** *** ** ******** ***** ****** – *** **** ***** ** decrease ***** supply ******* **** ***** ******** **** ******* *** ******** rate *** *** charges banks **** ****** ***** **** *** **** Federal ***** Rate ******* *** ********* ******* ******** ****

*******

banks

utilizing

*******

***** ******

**

******* ** * ***** ******* ************ ******* *** ******** **

****

deposits

******** by *** *** ** ** **** ** **** Banks **** **** **** ***** ******** ****** available ** ***** ****** ******* *** *** government

****

fiscal

******

to

*******

price

*********

****

**********

***

********

*******

******

fiscal

*******

Fiscal

******

*******

***

********

**************

***

***

collection

*********

**

*** ********** to ********* ******** activity
******* *** ****************** ****** *** ******** ********** ********** ******** ******* revenue ****** ******* ***** **

***

for

*************

**********

************ ******* ***** and services ********* ** the ********** **** *** revenues ** ******** ****** INTERNATIONAL ********** ***********

Economic

*********

Explain

how

specialization

*** ********* ******** between ****** *** ******* ******** *** ************ of **** ******** *Provide examples ** *** *********** ***

businesses

specialize

Division

**

*****

refers ** *** ******** ** ******** *** **** ** **** ********* **** ******** ***** Workers ****** specialized ** ********* tasks ** ****

*

******

by

doing

tasks

****** our ***** ** purchase ***** and services from other ******* Division ** ***** and Specialization ** *** basis *** an ******* ** exist * ******** *** ***** ** ****** ** time ******** **

switch

*****

create

****

*********

ways to ** the ***** Explain **** both ******* **** as * ****** ** voluntary ************** exchange
** *********** **** all ** our **********

*******

*********

**

***

****

*** ** the goods *** ******** **** **** ************** is the basis ** trade *** ***************

***** *********** ********** ****** regions and ********* ********* * dairy ******* * ******** ************* ********** Explain why *********** ********** and *********** *****

*****

and

*********

******

***

***********

between

********

*********

***

***********

advantage

***********

*********

*******

***

*******

to

*******

*

good

**

service

at

a

*****

***********

****

****

some

*****

******** (the economic ***** *** ************** *** ****** ******** ********* ******* *** ******* ** ******* **** ***** ** a good ** *******

****

****

other

********

using

the

****

********

**

**********

*******

****

****

*****

*****

*****

because

**

comparative

*********

in

***

**********

of

*

good

or

service

***********

********* ******* every country ****** ******* *** trade ***

****

**

*****

**

***

a *********** ********* *** **** ** ******* ** which *** opportunity cost is ****** ******* with *********** advantage ****** the ******* ***** in ****** ******** ** ***** –

*************

*****

******

increased

***********

********* ******* of ***** ********* to consumers

*******

new

********** and ********** methods helps low-income countries

*******

***

difference between ******* of trade ***

*******

**

*********

Balance ** ***** ******* * ********** ** ******* *** ******* ** goods *** services
Balance of

********

*******

the

******

**

all ************ ** ******* good *** ******** ******* ********* *** ** ********* ** ******** ***** ********** ******* *** ********* ********* *****

*****

barriers

***

*********

********

**** trade
define ***** ******** ** ******* ****** ********* ********* and ********** ****** ******* * tax on ******** ***** ***

services

******

*******

*

limit

on *** ******** ** a ******* **** may be ******** ** ********* ********* – to impose certain ********** before

********

consent

**

******

a

good or service Standards ******* ************ ** ******* ****** ** ******* **** **** be met ** ***** ****** ********** ********* ******* ********* assistance from ********** ** ** ********** **

********

*****

**********

to

be

********** ** *** ******* ******** ***** *** benefits ** trade barriers

****

*****

Designed

**

*******

*******

***

******* domestic ********** *** ********* ************* is ** ******* to protect *

**************

*******

trade

********

***

**** jobs in *** area *** ** ***

****

time

******* **** ** *******

****

**** specific

********

**

*****

********

******* import quotas ********** barriers like **********

administrative

requirements

regulations ** *********** ***********

List

specific ********

of

*******

****** **** ** *** ** ***** ASEAN

**

*******

******** Union
***** ******* North ******** **** ***** *********

[US/Canada/Mexico

ASEAN

–

***********

of Southeast Nations
******** ******* Common ****** of *** South ****** America]
***** players ** *** world stage:
**** – ****** ****** *****

******

****

*******

*******

Agreement

** Tariffs *** ****** *** ******* ***** Trade

*************

***

*******

International ******** ***** ***** Bank
******** arguments for *** *******

****

trade

***

********* **** often ***** AGAINST **** ************** **** **** ** ******* **** *** *****

in our ******* ******** ******** ***** ******* treat ***** ******* unfairly other ******* **** ***** ***** in *** ******* other *********

****

***

products

****

being

**** ** ***** ******* *** ******** *** free ************** ***** ******

***

*****

more

*******

in

goods *** ******** ****** ******** ** ****** *******

of

increased

****** as * result of lower prices
*******

how

*******

in

********

***** *** ******

***

**********

***** ** *********** ** *** United ****** *** in ***** ********** Exchange **** ** *** amount ** *** country’s currency **** is ***** to one unit

**

another

country’s

********

******* ** yen) Exchange rates are ********** ** ****** *** demand *** ********* typically **** ** be **** ** their

country’s

********* Define exchange rate ** the ***** ** *** ************** ******** ** ***** of ******* ************** currency
Exchange **** ******* the ***** ** *** ************** ******** ** ***** ** another nation’s ********* ******

information ** exchange ***** ******* ******* ****** Rate ** ***** *** currency *** be ********* into

******* *** ******** **** ** **** **** ****** ********** one ******** to ******* ***** ** *** *** ******** ** ****** **

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