Quick Review

 Scarcity of Resources  4 Factors of Production  Land, Labor, Capital and Entrepreneurship  Allocating Resources  Determines Economic System  Basic Questions: What, How, For Whom  Based on values & goals  Market, Command, Traditional, Mixed Defining Economics

Command  Central planning  Equity, Security  Karl Marx  Communism Market  Free Enterprise  Capitalism  Adam Smith  Laissez Faire  Efficiency, Growth Overview of Systems In Reality…all mixed!!

CIRCULAR FLOW GDP UNEMPLOYMENT INFLATION

HOUSEHOLDS BUSINESSES/FIRMS MARKETS: EXCHANGE! FACTOR/RESOURCES PRODUCTS/GOODS

 Higher numbers are better!  Consecutive negative numbers indicate recession  Real GDP (vs Nominal) is adjusted for inflation  Per Capita provides ratio to population and therefore the available resources per person within a country – (Standard of living)

 Ideal 1-3%  % Comparison of Consumer Price Index  Causes:  Cost Push (too many production costs)  Demand pull (Too much demand)  Quantity (too much money)  Stagflation (High unemployment and increasing costs) INFLATION

 The lower the % the better!  People looking for work who are unable to obtain a job  Often linked to Recession because its main cause is often cyclical UNEMPLOYMENT

 Minimum wage  Government debt  Government taxes  Gender inequity  Globalization… MISCELLANEOUS…

 Increasing Global Integration (Interdependence)  May be cultural, political and economic  Often the driving cause is economic – TRADE  Benefits  Drawbacks GLOBALIZATION