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Related Flashcards
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Cards In This Set
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Occurs because human wants exceeds limits of available resources.
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Scarcity
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What are in finite supply and need to be used to their best use?
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Resouces such as raw materials
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It is not uncommon for the government to face what?
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Shortage of funds
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Difference between what the government spends each year and government revenue.
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Deficit
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Accumulation of deficits over time.
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National Debt
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Problems arise when governments try to reduce what and maintain a high what?
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Reduce taxes and maintain high level of expenditures
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Value of the next best alternative that is given up.
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Opportunity Cost
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What are the 3 main factors of production?
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Land, Labor, Capital
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What is used to assist labor in the production process?
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Capital
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Debt (bonds) and equity (stocks) markets where a company can raise money.
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Capital Markets
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When someone purchases financial assets such as stocks and bonds what are they doing?
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Saving
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Help link together savers and firms that borrow for investment capital.
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Financial Intermediaries
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What is the production possibilities frontier used to illustrate?
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Scarcity, choice, and opportunity cost
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Downward slope to the right on a PPF graph.
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Tradeoff present in production
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What are the 3 assumptions that must be met for a country to achieve a point along the PPF?
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Finite resources, full and efficient use of resources, a given state of technology
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