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Details Title: economic terms Description: economic terms Total Flash Cards: 35 Created: 01/15/2006 18:20:53	To study from this set of flash cards, or to create your own your own study flash cards, register HERE. If you are already a registered user, CLICK HERE.
Cards Term aggregate demand Definition the amount of goods and services in the economy that will be purchased at all possible price levels Term automatic stabilizer Definition a government program that changes automatically depending on GDP and a person's income Term board of governors Definition the seven-member board that oversees the Federal Reserve System Term budget deficit Definition a situation in which the government spends more than it takes in Term budget surplus Definition a situation in which the government takes in more than it spends Term check clearing Definition the process by which the banks record whose account gives up money and whose account receives money when a customer writes a check Term corporation Definition a legal entity owned by individual stockholders Term cost push theory Definition theory that inflation occurs when producers raise prices to meet increased costs Term cyclical unemployment Definition unemployment that rises during economic downturns and falls when the economy improves Term deflation Definition a sustained drop in the price level Term demand pull theory Definition theory that inflation occurs when demand for goods and services exceeds existing supplies Term demand side economics Definition a school of economics that believes government spending and tax cuts help an economy by raising demand Term discount rate Definition rate the Federal Reserve charges for loan to commercial banks Term elastic Definition describes demand that is very sensitive to change Term excess reserves Definition in banking, reserves of cash more than the required amount Term factor payments Definition the income people receive for supplying factors of production: land, labor, or capital Term fiscal policy Definition the use of government spending and revenue collection to influence the economy Term inflation Definition a general increase in prices Term market basket Definition a representative collection of goods and services Term medicaid Definition entitlement program that benefits low-income families, some people with disabilities, and elderly people in nursing homes Term medicare Definition a national health insurance program that helps pay for health care for people over age 65 or who have certain disabilities Term mixed economy Definition economic system that combines the free market with limited government involvement Term monetary policy Definition the actions of the Federal Reserve takes to influence the level of real GDP and the rate of inflation in the economy Term national debt Definition all the money the federal government owes to bondholders Term open market operations Definition the buying and selling of government securities to alter the supply of money Term opportunity cost Definition the most desirable alternative given up as the result of a decision Term partnership Definition a business organization owned by two or more persons who agree on a specific division of responsibilities and profits Term poverty rate Definition the percentage of people who live in households with income below the official poverty line Term progressive tax Definition a tax for which the percent of income paid in taxes increases as income increases Term quantity theory Definition theory that too much money in the economy causes inflation Term regressive tax Definition a tax for which the percent of income paid in taxes decreases as income increases Term sole proprietorship Definition a business owned and managed by a single individual Term structural unemployment Definition unemployment that occurs when workers' skills do not match the jobs that are available Term tariff Definition a tax on imported goods Term tight money policy Definition monetary policy that reduces the money supply