Introduction to Economics and Economic Concepts

Flashcards covering key concepts from lectures on economics, focusing on definitions and applications.

Economics

The study of how individuals and societies choose to allocate scarce resources.

Opportunity Cost

The cost of a choice includes the lost opportunity of the benefit of the next best choice.

Comparative Advantage

The ability of a country or individual to produce a particular good at a lower opportunity cost than its competitors.

Trade-off

A balance achieved between two desirable but incompatible outcomes.

Microeconomics

The branch of economics that focuses on individual households and firms.

Macroeconomics

The branch of economics that studies the economy as a whole and focuses on large-scale economic factors.

Aggregate Demand

The total demand for goods and services within an economy at a given overall price level and in a given time period.

Aggregate Supply

The total supply of goods and services that firms in an economy are willing to sell at a given overall price level.

Equilibrium

A situation in which supply and demand are matched and prices stable.

GDP (Gross Domestic Product)

A monetary measure that represents the market value of all final goods and services produced in a specific time period.

Inflation

A general increase in prices and fall in the purchasing value of money.

Unemployment

The situation when individuals who are capable of working are unable to find jobs.

Fiscal Policy

Government policy regarding taxation and spending to influence economic conditions.

Monetary Policy

The actions of a central bank, like the Federal Reserve, to control the money supply and interest rates.

Economic Growth

An increase in the inflation-adjusted market value of the goods and services produced by an economy over time.

Business Cycle

The fluctuations in economic activity that an economy experiences over a period of time.