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[Economics]
the social science that studies production, distribution and…
[Economics]
the social science that studies production, distribution and consumption of goods and services
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Macro Economics:branch of economics dealing with the performance, structure, behavior, and decision-making of an economy as a whole.
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Recession and Responses
Business Cycle : there is a boom when the economy is high and a bust with the fear fairy where spending is low and unemployment is high: expansion and contraction
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Fiscal Policy: Changing the spending of government money and taxes. Expansionary-when unem up lower taxes and increase spending. Contractionary used to fight inflation.
Marginal Propensity to Consume: how likely you are to spend the money that the government gives you.
Multiplier: comes from mpc 1/1-mpc and then times by the amount of money to see what impact it will have in the economy
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Debt vs Deficit: Deficit is when the amount of money that the government borrows is more than it gets that year. The debt is the amount of money that the government owe.
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Philosophies
Keynes: recessions are caused by physiological states, confidence and fear fairy. The government should steer the economy. Re-engage stimulus within the market, multiplier effect.
Hayek: The government should get their hands off of the people's money. The fiscal policy where the gov lends out fake money causes only a sugar high. Needs to come from savings
Paradox of thrift: increase in autonomous saving leads to a decrease in aggregate demand and thus a decrease in gross output which will in turn lower total saving.
Fiscal and Monetary "sugar high": The gov borrows money (F) and makes borrowing money cheap and causes an artificial boom. (M) the fed gives money to banks for them to give to people.
Micro Economics:
Branch of economics that studies behaviors of individuals and their ability to make decisions.
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Supply and Demand
Price elasticity of demand: measure how responsive demand is change in price calculation: % change in quantity/ % change in price
Price Floor: are high, setting price control from going to low
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Price ceiling: low, control market
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Law of Supply: At higher prices people tend to produce more and at lower prices people choose to produce less
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Cost of production: other, government policy including taxes and subsidies
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Law of Demand: At lower prices people choose to buy more and at higher prices people tend to buy less
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Financial Info
Federal Tax: government, military
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Payday loans: a system that gives you quick cash and has a very high interest rate in return. They are for people will bad credit score and high risk clients. You can get trapped because you can't pay your original amount back so you borrow more.
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