Intermediate Macroeconomics ECN3082 L, Mussurov Altay

portion of a deposit that must be held at the bank for withdrawals.

The fraction of total deposits that must be kept on reserve.

Called factors of production, these are commonly grouped into the four categories of labor, physical capital, land or natural resources, and entrepreneurial ability.

An excise tax levied on goods not produced in the domestic market.

A linear relationship showing how increases in disposable income cause increases in savings.

The imbalance between limited productive resources and unlimited human wants. Because economic resources are scarce, the goods and services a society can produce are also scarce.

Final goods and services that are resold. Even if they are resold many times, final goods and services are only counted once, in the year in which they were produced.

When firms focus their resources on production of goods for which they have comparative advantage, they are said to be specializing.

Additional benefits to society, not captured by the market demand curve from the production of a good, resulting in a price that is too high and a market quantity that is too low.

Additional to society, not captured by the market supply curve from the production of a good, result in a price that is too low and market quantity that is too high.