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Economics (Macroeconomics: the study of the economy as a whole (Government…

- - - - GDP= C + I + G + NX
    - - Structural: that job doesn't exist anymore due to technology
      - Cyclical: caused by recession
      - Frictional: between jobs
  - - - Expansionary: When we need to put money into the economy so we increase spending and GDP to get out of a recession
        
        Lower taxes, increase govt spending
      - Contractionary: When the economy is getting too "hot" and we need to take money out of circulation to avoid recession
        
        Increase taxes, less govt spending
      - Multipliers: if money is put into the economy, how will it multiply through the economy
        
        1 / 1-MPC
    - - Fiat Money vs. Gold standard: money used to be based on how much gold we had, fiat money is currency with nothing backing it up accept legality
      - What is money good for?
        
        Comparing values of things
        
        Accumulate value
        
        Spending; unit of exchange
      - The Fed: the federal reserve is America's central bank that controls the money supply in our country. It supervises all banks and banks can store money there as well as borrow from the fed.
        
        Dual Mandate: Maximize sustainable employment while limiting inflation
        
        Controlling the money supply:
        
        Changing the Discount Rate: Changing the interest rate at which banks can borrow money from the fed
        
        Open Market Operations: buying or selling treasury bonds; buying increases money in circulation, selling decreases
        
        Changing the Reserve Requirement: changing the amount of money banks have to keep locked up and not available to loan out
        
        Paying interest on excess reserves: the fed can pay banks interest on what reserves they have to banks want to keep more in reserves because it pays (decreases money in circulation)
        
        How it Functions: There are 7 board members with one chairman. Board members serve for 14 years
- - - - Law of Demand: at lower prices, people are willing to buy more
        
        Price elasticity of demand: how much a change in price will affect demand
        
        Demand shifters: what factors in an economy shift demand
        
        change in customer information
        
        change in expectations of price
        
        change in price of a related good
        
        change in income
        
        change in population of customers
        
        change in taste/preferences
      - Law of Supply: at higher prices, sellers are willing to produce more
        
        Supply shifters
        
        technology change
        
        future expectations about price
        
        cost of production
        
        Number of producers/sellers in an area
      - Equilibrium: where supply and demand meet on the marginal utility graph
        
        Surplus: When supply is greater than demand
        
        Shortage: when demand is greater than supply
        
        Kinds of Goods
        
        Normal Goods: as income increases, people will buy more of that good
        
        Inferior Goods: as income decreases, people will buy more of that good
        
        Complementary: Goods that are often bought together and often have an effect on one another's deand
        
        Substitute goods: goods that can be interchanged, like brand and off brand goods
      - Govt Price Controls: price ceiling and floor. the max or min a good can cost
    - - Gross Pay: Your paycheck before taxes and deductions
      - Net Pay: Your pay after taxed income and deductions
        
        Deductions: Money taken out of your paycheck for various reasons
        
        FICA taxes: taxes that go towards medicare, medicaid, and social security
      - Federal Taxes: taxes you pay to the government determined by income brackets
      - State taxes
      - Mortgage
        
        Fixed Rate: No adjustable interest rate
        
        Sub-Prime: interest rate is adjustable
      - Payday Loans: short term loans, easy to get, with very high interest rates
        
        Many people don't have the money to pay back the loan they took out so they take out another payday loan, so it's an endless cycle of debt
      - FICO score: your credit rating; how good you are at paying your credit card bill
    - - Land: land with the things you need to produce your good
      - Labor: employees to produce your good
      - Capital: Money to start production
  - - - Libertarian Paternalism: nudging one choice but in the end, an individual is able to choose what they want