ECN 204 Study Guide - Midterm Guide: Fixed Exchange-Rate System, Net Domestic Product, Nominal Rigidity
Document Summary
National income, total consumption, total investment, avg price level of goods/services. Process of turning inputs to outputs depends on tech available. Resources methods of production goods/service. Growth in total output without more supplies/better tech. Financial or real assets in expectation of financial gain. Flexible prices - prices adjusting quickly to unexpected changes in demand. Sticky prices - prices inflexible, do not change rapidly to changes in demand. Consumers and producers (consumers provide the factors of production such as labour, capital, entrepreneurship; producers provide the g&s. Consumers receive factor income, producers receive expenses on g&s. Private sector circular flows via market mechanisms. Real flows from factor markets to firms (labour) to g/s markets (g/s) Monetary flows from factor markets to consumers (wages) to g/s markets (expenses on g/s) Circular flows via market mechanisms (closed econ. with gov) Real flows from government to consumers and producers (public g/s) Monetary flows from producers and consumers to government (taxes)
