MGEB05H3 Lecture Notes - Purchasing Power Parity, Monopolistic Competition, Oligopoly

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Published on 15 Apr 2013
School
UTSC
Department
Economics for Management Studies
Course
MGEB05H3
Professor
Monopolistic Competition A market or industry characterized by a large number of firms supplying
products that are similar buy distinctive enough from one another to give firms some ability to influence
price
Oligopoly A market or industry characterized by a small number of very large firms that have the
power to influence the price of their product and/or resources
Monopoly A market or industry with only one producer, who can set the price of its product and/or
resources
Natural Monopoly A market of industry in which having only one producer is most efficient because it
can meet all of consumers demand for the product
External Environment Everything outside an organization’s boundaries that might affect it
Economic Environment Conditions that economic system in which an organization operates
Business Cycle Pattern of short-term ups and downs (expansions and contractions) in an economy
Recession Period during which aggregate output, as measured by real GDP, declines
Depression Particularly server and long-lasting recession
Aggregate Output Total quantity of goods and services produced by an economic system during a
given period
Nominal GDP GDP measured in current dollars or with all components valued at current prices
Real GDP GDP calculated to account for changes in currency values and price changes
Purchasing Power Parity Principle that exchange rates are set so that the prices of similar products in
different countries are about the same
Productivity Measure of economic growth that compares how much a system produces with the
resources needed to produce it
Balance of Trade The total of a country’s exports (sales to other countries) minus its imports
(purchases from other countries)
National Debt The total amount of money that the government owes its creditors
Budget Deficit The result of the government spending more in one year than it takes in during that
year
Stability Condition in an economic system in which that amount of money available and the quantity of
goods and services produced are growing at about the same rate
Inflation Occurrence of widespread price increases throughout an economic system
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Document Summary

Monopolistic competition a market or industry characterized by a large number of firms supplying products that are similar buy distinctive enough from one another to give firms some ability to influence price. Oligopoly a market or industry characterized by a small number of very large firms that have the power to influence the price of their product and/or resources. Monopoly a market or industry with only one producer, who can set the price of its product and/or resources. Natural monopoly a market of industry in which having only one producer is most efficient because it can meet all of consumers demand for the product. External environment everything outside an organization"s boundaries that might affect it. Economic environment conditions that economic system in which an organization operates. Business cycle pattern of short-term ups and downs (expansions and contractions) in an economy. Recession period during which aggregate output, as measured by real gdp, declines.

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