ECON 1B03 Study Guide - Midterm Guide: Price Floor, Lead, Steak Sauce

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ECON 1B03 Full Course Notes
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ECON 1B03 Full Course Notes
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Increasing inflation (printing more money, thus everything seems to cost more) will decrease unemployment in the short run. Economists act as scientists, trying to explain the world, and as policy advisors, trying to improve it circular flow diagram: households, firms, market for goods and services, market for factors of production. Factors of production: resources the economy uses to produce goods and services. Households: own factors of production sell/rent them to firms for income. Use them to produce goods and services sell goods and services. Production possibilities frontier: shows the combinations of 2 goods the economy can possibly produce. As you move along the ppf, you shift resources from the production of one good to another this is an opportunity cost: we can analyse it numerically using the slope of the line. Economic growth: with additional resources, ppf shifts outward. Economy can produce more of any combination of goods.

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