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Solutions for Chapter Module 10: The Circular Flow and Gross Domestic Product

Full solutions for Krugman's Economics for AP® (High School) | 2nd Edition

ISBN: 9781464122187

Solutions for Chapter Module 10: The Circular Flow and Gross Domestic Product

Chapter Module 10: The Circular Flow and Gross Domestic Product includes 5 full step-by-step solutions. This expansive textbook survival guide covers the following chapters and their solutions. Since 5 problems in chapter Module 10: The Circular Flow and Gross Domestic Product have been answered, more than 8205 students have viewed full step-by-step solutions from this chapter. Krugman's Economics for AP® (High School) was written by and is associated to the ISBN: 9781464122187. This textbook survival guide was created for the textbook: Krugman's Economics for AP® (High School), edition: 2.

Key Business Terms and definitions covered in this textbook
  • competitive market

    a market with many buyers and sellers trading identical products so that each buyer and seller is a price taker

  • demand deposits

    balances in bank accounts that depositors can access on demand by writing a check

  • diminishing marginal product

    the property whereby the marginal product of an input declines as the quantity of the input increases

  • efficient scale

    the quantity of output that minimizes average total cost

  • equilibrium quantity

    the quantity supplied and the quantity demanded at the equilibrium price

  • externality

    the uncompensated impact of one person’s actions on the wellbeing of a bystander

  • Fisher effect

    the one-for-one adjustment of the nominal interest rate to the inflation rate

  • fractional-reserve banking

    a banking system in which banks hold only a fraction of deposits as reserves

  • free rider

    a person who receives the benefit of a good but avoids paying for it

  • inflation rate

    the percentage change in the price index from the preceding period

  • macroeconomics

    the study of economy-wide phenomena, including inflation, unemployment, and economic growth

  • median voter theorem

    a mathematical result showing that if voters are choosing a point along a line and each voter wants the point closest to his most preferred point, then majority rule will pick the most preferred point of the median voter

  • money multiplier

    the amount of money the banking system generates with each dollar of reserves

  • net capital outflow

    the purchase of foreign assets by domestic residents minus the purchase of domestic assets by foreigners

  • normative statements

    claims that attempt to prescribe how the world should be

  • price elasticity of demand

    a measure of how much the quantity demanded of a good responds to a change in the price of that good, computed as the percentage change in quantity demanded divided by the percentage change in price

  • production possibilities frontier

    a graph that shows the combinations of output that the economy can possibly produce given the available factors of production and the available production technology

  • productivity

    the quantity of goods and services produced from each unit of labor input

  • structural unemployment

    unemployment that results because the number of jobs available in some labor markets is insufficient to provide a job for everyone who wants one

  • substitutes

    two goods for which an increase in the price of one leads to an increase in the demand for the other

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