What is economics
The study of the choices people and society make to attain their unlimited wants, given their limited resources.
What is macroeconomics
The study of the economy as a whole. Includes: inflation, economic growth.
What is microeconomics
The study of individual markets.
The study of how households and firms make choices, how they interact in the market and how governments influence their decisions.
What is opportunity cost
The true cost of something is what you give up to get it.
Everything has an opportunity cost…. there is always something else that could of been done with that money.
Who is Adam Smith
- He is a classical economist.
- Founder of the modern disciple of economics.
- Published Wealth of nations (concepts: natural price, equilibrium, law of markets).
What is the invisible hand
Metaphor created by Adam smith, for the unseen forces that move the free market economy.
What are some of Adam Smiths theories
- Invisible hand - the tendency for free market to regulate themselves.
- Minimising the role of the government and taxation in free markets.
- Division of labour and specialisation produces prosperity (specialise in what you do well and trade with others for everything else).
Who is Alfred Marshall
- Neo classical economist.
- Published textbook : Principles of economics.
- Famous for the supply and demand curve, elasticity, consumer surplus and the definition of econmics.
What is the supply and demand curve
A graphical representation of how the interaction of producers of goods/services and consumers in a free market lead to an equilibrium price and quantity.
Who is John Maynard Keynes
- Founder of Keynesian economics.
2. Published in 1936: The general theory of employment, interest and money.
What are Keynesian theories
- Free markets do NOT provide a solution to unemployment.
- Aggregated demands ( demand for final goods and services) is the most important driving force in an economy.
- Government intervention to achieve full employment and stability.
What is the Neo-classical/Neo-liberal consensus on economic policy.
- Competitive markets - The freeing up of the markets to make them more competitive.
- Macroeconomic stability - Is delivered by low inflation and low government debt.
- Globalisation / Free Markets - The advantages of opening up to trade or globalisation.
What is the difference between Keynesian policy and neo classical policy- in regards to what they focus on.
- Keynesian-ism focuses on the ups and downs of a business cycle.
- Neo-classical focuses on economic growth.
What is the difference between Keynesian policy and Neo classical policy - in relation to there goals.
- Keynesian-ism’s goals are full employment.
2. Neo classical goals are low and stable inflation and low government debt.
What is the difference between Keynesian policy and Neo classical policy - in relation to “reliance”
- Keynesian-ism relies on Government intervention.
2. Neo classical relies on the working of the market.
What is the compound interest formula, used to calculate economic growth of a country and between countries.
An = Ao(1+r)n
What is compound interest
Interest calculated on the initial principal, which also includes all of the accumulated interest of previous periods of a deposit or loan.
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week 117
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Week 2 - GDP & Inflation19
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Week 3 - Money & Interest rates23
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Week 4 - Business cycle and unemployment18
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Week 6 - Fiscal policy / Multiplier & Gov growth22
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Week 7 - Microeconomics & supply/demand curve24
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Week 8 - Surplus and Elasticity21
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Week 9 - market failure and government intervention16
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Week 10 - competition & market power15
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Week 11 - Comparative advantage and trade12
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Exam revision36
