A graph that shows the various cominations of output that the economy can possibly produce given the available factors of production and the available production technology that firms use to turn these factors into output.
Circular Flow Diagram
a diagram of the economy that shows the flow of goods and services, factors of production, and monetary payments between household and firms
Value statements, look for words like OUGHT and SHOULD
ex: We should increase minimum wage
__________ ___________ make a claim about how the world IS -They are descriptive -Ex: Minimum-wage laws cause unemployment
The study of how households and firms make decisions and how they interact in specific markets.
study the effect of rent control on housing, the impact of foreign competition on the auto industry or the effect of compulsory school attendance on workers earnings.
the study of the behavior and decision making of entire economics
might study the effect of borrowing by the federal govt, the changes over time in the economy's rate of unemployment, or alternative policies to promote growth in national living standards
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