ECO 1002: Introduction to Macroeconomics

These flashcards cover key concepts, definitions, and implications discussed in the Introduction to Macroeconomics lecture, particularly focusing on labor markets, financial markets, and elasticity.

What are the key components of the Labor Market Model?

The supply and demand for labor, where the supply side represents the willingness of workers to provide labor at certain wages and the demand side represents firms hiring workers to produce goods.

What does the Law of Supply in the labor market state?

The higher the wage, the higher the quantity of labor supplied.

What does the Law of Demand in the labor market state?

The higher the wage, the lower the quantity of labor demanded.

What type of shocks can affect the Labor Market?

Demand shocks and supply shocks, such as changes in certification requirements or preferences.

What is the role of financial markets in the economy?

They facilitate savings and investments, which are crucial for innovation and economic growth.

What is the equilibrium price in a financial market?

The interest rate, where the supply and demand for financial capital intersect.

What is Price Elasticity?

The percentage change in quantity resulting from a percentage change in price.

What is Price Elasticity of Demand?

The percentage change in quantity demanded resulting from a percentage change in price.

What two elasticities can be measured in economics?

Income elasticity of demand and cross-price elasticity of demand.

What conclusion was drawn about the Market Model?

It predicts market responses, details of elasticities, and its importance before expanding to a macroeconomic setting.