Basic Economic Terms

1/20/16

Economics – The most efficient use of your resources to accomplish your goals

What are your goals?

Law of supply and demand-

· When the supply of a good or service is scarce and wanted by many people, its price increases.

· When there is larger amount of the good or service than the number of people who want it, its price decreases.

Marginal Utility

· Whenever you have more of something its use for your diminishes. Thus, $100 woould be more valuable when you eat $1000/month

Gross Domestic Product (GDP)

· fundamental measure of the size of an economy, equal to the som of incomes of all people

Growth Rate

· The growth of an economy is commonly measured in terms of GDP growth rate

Inflation

· Measure of increase in the general level of prices for goods and services.

Interest Rates

· When you loan money and you expect something in return. The excess is interest.

· Positive number that measures how much excess you will get.

· Right now the Fed’s key interest rate ranges from 0.25% to 0.5% .

Opportunity Cost

· The cost of doing this instead of doing this.

· When you do an activity, you tend to equate how good the activity is when compared to the alternatives.

	Created by Niki Binondo over 9 years ago

Final Government and Economics Note on Basic Economic Terms, created by Niki Binondo on 01/21/2016.