Chapter 2 - Thinking Like an Economist Flashcards Preview

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Flashcards in Chapter 2 - Thinking Like an Economist Deck (6)
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0
Q

production possibilities frontier

A

a graph that shows the combination of output that the economy can possibly produce given the available factors of production and the available production technology

1
Q

circular-flow diagram

A

a visual model of the economy that shows how dollars flow through markets among households and firms

2
Q

microeconomics

A

the study of how households and firms make decisions and how they interact in the markets

3
Q

macroeconomics

A

the study of economy wide phenomena, including inflation, unemployment, and economic growth

4
Q

positive statements

A

claims that attempt to describe the world as it is

5
Q

normative statements

A

claims that attempt to prescribe how the world should be