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Final Study Guide
Spring 2009, Quarter 3
Unit 1
 Voluntary Exchange
 Command, Traditional, and Market economy (characteristics of
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each)
Factors of production
Corporations, partnerships, and sole proprietorships
(characteristics of each)
Mergers
Economic Interdependence
Production Possibilities Frontier (PPF)
Paradox of value
Opportunity cost
Consumer goods
Capital goods
Non-durable goods
Division of labor
Free enterprise economy
Modified private enterprise system
Consumers
Utility
Scarcity
Trade-off
Unit 2
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Demand
Supply
Law of supply/demand
Elasticity
Demand elasticity
Inelastic demand
Elastic demand
Unit elastic
Substitutes
compliments
Change in quantity demand/supply
Change/shift in demand/supply
Subsidy
Demand/supply curve
Market equilibrium
Equilibrium price/quantity
Surplus
Shortage
Marginal utility
Increasing marginal utility
diminishing marginal utility
Substitution effect
Income effect
Market supply curve
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Ch. 13, 14, and 15 Study Guide
 Gross Domestic Product
(what is included and what
is not)
 GDP per capita (how is it
calculated?)
 Net National Product
 Gross National Product
 Consumer sector
 Investment sector
 Government sector
 Foreign sector
 Net exports
 Market basket
 Current GDP (not
adjusted for inflation)
 Real GDP (is adjusted for
inflation)
 Peaks
 Troughs
 Business cycle
 Expansion
 Recession
 Unemployment rate (how
do you calculate it? What
are its limitations)
 Structural unemployment
 Frictional unemployment
 Cyclical Unemployment
 Seasonal Unemployment
 Technological
Unemployment
 Full employment
 Structure of the Fed
 Board of governors (who
appoints them?)
 Reserve Requirement
 What happens to the
money supply, inflation,
unemployment, GDP if the
fed increases/decreases
interest rates?
 What happens to the
money supply, inflation,
unemployment, GDP if the
fed increases/decreases the
reserve requirement?
 What happens to the
money supply, inflation,
unemployment, GDP if the
fed buys/sells bonds or
treasuries?
 What is the long-run
impact of increasing the
money supply?
 The great depression
(what marks the
beginning?)
 Federal Open Market
Committee (what do they
do?)
 Disposable personal
income
 Standard of living
 Price index
 Consumer price index
 Producer price index