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 almost 11 years ago

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

Basic Economic Terms