ECONOMICS STUDY GUIDE
I. FUNDAMENTALS:
 economics
 wants
 needs
 natural, renewable & nonrenewable resources
 factors of production: land, labor, capital, human
capital, entrepreneurship
 scarcity
 price ceilings
 price floors
 rationing
 rational decision making (define problem, list
alternatives, state criteria, evaluate alternatives,
make a rational decision)
 marginal cost & marginal benefits
 tradeoff
 opportunity cost
 PPC
 specialization
 division of labor
 profits
 productivity
 voluntary exchange
 innovation
 efficiency
 traditional economy
 bartering
 command economy
 profit motive
 equity
 market economy
 mixed economy
 public goods & services
 redistribution of income
 market failure
 private property rights
 deregulation
 inputs
 outputs
 capital investment
 capital goods
 interest & interest rate
 consumer goods
 standard of living
II. MICROECONOMICS
 circular flow of economic activity
 microeconomics
 interdependence
 product market
 factor/resource market
 currency
 medium of exchange
 standard of value
 store of value
 law of supply
 law of demand
 supply
 demand
 law of supply & demand
 equilibrium
 market-clearing price
 supply curve
 demand curve
 shortage
 surplus
 elasticity
 consumer/producer
 elastic/inelastic
 substitute
 complement
 inflation
 deflation
 wage/price controls
 minimum wage
 price floor
 price ceiling
 pure competition
 monopolistic competition
 monopoly
 oligopoly
 sole proprietorship
 partnership
 liability
 limited life
 corporation
 stock
 shareholder
 dividends
III. MACROECONOMICS
 economic indicators
 GDP
 per capita GDP
 CPI
 stagflation
 national debt
 national deficit
 deficit spending
 national surplus
 growth
 exports
 imports
 net exports
 trade deficit
 trade surplus
 cyclical unemployment
 structural unemployment
 frictional unemployment
ECONOMICS STUDY GUIDE
 seasonal unemployment
 consumption
 income
 disposable income
 revenue
 income tax
 capital gains tax
 fiscal policy
 fiscal conservative
 fiscal liberal
 New Deal
 aggregate supply
 aggregate demand
 overproduction
 business cycle
 peak/trough/expansion/contraction
 recovery
 recession
 depression
 prosperity
 central bank
 Federal Reserve System
 monetary policy
 Board of Governors
 Chairman
 Federal Open Market Committee
 Federal Reserve Banks
 member banks
 reserve requirement
 "easy money"
 "tight money"
 discount rate
 discount window
 open market operations
IV. INTERNATIONAL ECONOMICS
 international trade
 market advantage
 absolute advantage
 comparative advantage
 protectionism
 free trade
 trade barriers
 quotas
 tariffs
 embargo
 standards
 recalls
 subsidies
 national security
 retaliation
 benefits/costs of trade barriers
 WTO
 United Nations
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European Union
ASEAN
NAFTA
OPEC
balance of trade
balance of payments
favorable balance of trade
unfavorable balance of trade
exchange rate
fixed/floating exchange rates
currency appreciation
currency depreciation
devaluation
purchasing power
purchasing power parity
V. PERSONAL FINANCE
 positive/negative incentives
 commercial bank
 interest charged vs earned
 collateral (security)
 credit unions
 savings & loan associations
 risk/return
 401K
 IRA
 earnings potential
 progressive tax
 regressive tax
 sales tax
 proportional tax
 credit
 mortgage
 mortgage pymts
 credit cards
 debit cards
 principal
 simple interest
 compound interest
 debt
 credit score
 insurance: life/health &
medical/disability/liability/property or homeowner's
 comprehensive liability