EC 202 Study Guide - Midterm Guide: Market Basket, Deflation, Purchasing Power Parity
19 Mar 2018
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Document Summary
Microeconomics = studies behavior of decision making unit (individual firms or agents, households) Macroeconomics = studies behavior of economic aggregates on a national scale (income, unemployment, inflation) Positive statements = statements of how world works. Normative statements = statements of how things should work. Economic models = formal statement of theory (may be expressed in words, equations, or graphs) Expansion = period from trough to peak, during which output & employment rise. Contraction = period from peak to trough during which output & unemployment fall; recession. Intermediate goods = goods that firms repackage or bundle w/ other goods to be sold later (not counted in gdp) Final goods = goods sold to final users or consumers. Nominal gdp = measured in current dollars or current prices we are paying for things. Real gdp = attempt to isolate change in amount of actual goods & services produced from changes in nominal figure due to price changes.
