Economics Vocab Quiz 2 Flashcards Preview

Gov and Econ > Economics Vocab Quiz 2 > Flashcards

Flashcards in Economics Vocab Quiz 2 Deck (11)
Loading flashcards...
1
Q

Circular Flow Diagram

A

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

2
Q

Firms

A

produce and sell goods and services

3
Q

Households

A

buy and consume goods and services

4
Q

Where are factors of production?

A

Firms: hire and use factors of production

Households: own and sell factors of production

5
Q

Factors of production

A

inputs used to produce goods and services

land, capital, labor

6
Q

Production possibilities frontier

A

Shows the combinations of output that the economy can produce given the available factors of production and technology

Looks like the guns vs. butter chart

7
Q

Microeconomics

A

Focuses on the individual parts of the economy

Ex: how households and firms make decisions and how they interact in specific markets

8
Q

Macroeconomics

A

Looks at the economy as a whole

Ex: nationwide economy, unemployment, economic growth

9
Q

Policy Advisor

A

When economists are trying to explain the world, they are scientists

When economists are trying to change the world, they are policy advisor

10
Q

Positive statements

A

Attempt to describe the world as it is

Descriptive analysis

11
Q

Normative statements

A

About how the world SHOULD be

Perscriptive analysis

More opinion than fact