ECON 100 Study Guide - Final Guide: Federal Funds Rate, Unemployment, Pork Barrel
Document Summary
Factors of production (resources): labor, land, capital, entrepreneurship. Nominal = in name only, real = actual. Marginal propensity to consume (mpc): fraction of an additional dollar we would spend from additional income. Sticky wages: prices are easy to adjust upward, but hard to adjust downward due to fixed wages and fixed prices (prices are relatively stable: it"s more effective to lay people off than to decrease wages. Liquidity: the ease with which you can have transactions take place and buy goods and services: electronic transactions and cash are most liquid. Pork barrel (spending): often politicians use tax money for concentrated benefits to their hometowns. Fiat: money has value by government decree only, not backed by gold. Quantitative easing: targeting long term treasury bonds rather than short term federal funds rate. Economics: the study of the economy, including how we allocate resources in order to supply our wants.
