Основы экономики. Земскова Л.П. - 7 стр.

LECTURE 2. BASIC CONCEPTS AND TECHNIQUES

1. Economic variables either influence or describe the allocation of scarce
   resources. Data are facts, usually numerical, that provide information about
   economic variables.
2. Models or theories, which are simplified descriptions of reality, are used in
   economics and other fields to aid understanding and to answer “what if”
   questions. All models are necessarily unrealistic; good models are those
   which give correct answers to questions of interest. Data are used both to
   suggest relationships that should be taken into account by models and to test
   and evaluate models after they have been developed.
3. The circular flow diagram provides an overview of the organization and
   working of the economy. Households obtain income by selling to firms the
   services of the factors of production they own. Firms use the factors of
   production to produce goods and services for sale to households, whose
   income makes it possible for them to buy the goods. Households and firms
   deal with each other in both the goods and factor markets.
4. Prices and quantities are the basic units of measurement in economics. The
   product of price and quantity is a dollar (ruble, euro, etc.) amount, or value.
5. The price level is the weighted average level of prices in the economy as a
   whole. A price index expresses the cost of a given market basket or
   collection of goods relative to the cost of the same goods in a base year.
6. The consumer price index (CPI) is based on the cost of a market basket of
   goods that reflects the purchases of a typical urban household. It is the most
   widely used price or cost of living index.
7. Nominal gross national product (GNP) is the total dollar value of the goods
   and services produced in the economy within a given period. Nominal GNP
   can change either because prices change or because physical production
   changes. Real GNP is the value of the output produced in a given year,
   calculated using the prices of a given base year. Real GNP is a measure of
   the economy’s physical quantity of production. The GNP deflator is equal to
   100 times nominal GNP divided by real GNP. The GNP deflator is a measure
   of the price level that is based on all goods and services produced in the
   economy.
8. Ratios (particularly shares, relative prices, and real prices) and percentage
   changes (particularly growth rates and inflation rates) are widely used in
   economics to make comparisons over time or among economic units (such as
   firms, households, states, or nations) at the same time.
9. Graphs of economic data, particularly scatter diagrams, are used to reveal
   trends, patterns, and possible relations between economic variables.
   Econometric techniques are used to describe relations between economic
   variables in terms of numbers and equations.
10.Most economic data are not generated by controlled experiments, and so it is
   often difficult to test the “other things equal” predictions of theory.

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