Joakim's AP Macroeconomics Blog: February 2017

January 26, 2017 - Circular Clow

8:05 PM

Circular Flow

Circular Flow - Represents the transactions in an economy by the flows around a circle

Economic Actors

1. Households - Person or group of people who share their income

2. Firms/Business - Organization that produces goods and services for sale

8:01 PM

7:58 PM

Factors of Supply and Demand

Equilibrium - The point in which a supply curve intersects with the demand curve.

Excess Demand - When quantity demanded is greater than quantity supplied; result in a shortage.

Price Ceiling - When the government puts a legal limit on how high the price of a product can be.

Excess Supply - It occurs when quantity supplied is greater than quantity demanded; results in surplus

Price Floor - Lowest legal price a commodity can be sold at.