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TEST 1
economics
71
Economics
Not Applicable
06/12/2008

Additional Economics Flashcards

 


 

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Term

real gdp

Definition
the value of the entire output produced annually within a country's borders, adjusted for price changes
Term
fiscal policy
Definition
changes in government expenditures and/or changes in taxes to achieve particular macroeconomic goals
Term
monetary policy
Definition
changes in the money supply, or the rate of growth of the money supply, to achieve particular macroeconomic goals
Term
price level
Definition
weighted average of the prices of all goods and services
Term
price index
Definition
a measure of the price level
Term
consumer price index
Definition
a widely cited index number for the price level: the weighted average of prices of a specific set of goods and services purchased by a typical household
Term
base year
Definition
the year chosen as a point of reference or basis of comparison for prices in other years; a benchmark year 
Term
inflation
Definition
increase in the price level and is usually measured on an annual basis
Term
real income
Definition

person's current-dollar amount of a person's income

Term
unemployment rate
Definition

the percentage of the civilian force that is unemployed: unemployment rate=number of unemployed persons/civilian labor force

Term
employment rate
Definition
the percentage of the civilian noninstitutional population that is employed: employment rate=number of employed persons/civilian noninstitutional population
Term
labor force participation rate
Definition
the percentage of the civilian noninstitutional population that is in the divilian labor force.  labor force participation rate+ civilian labor foce/civilian onninstitutional population
Term
frictional unemployment
Definition
unemployment due to the natural "frictions" of the economy, which is caused by changing market conditions and is represented by qualified individuals with transferable skills who change jobs
Term
stuctural unemployment
Definition
unemployment due to structural changes in the economy that eliminate some jobs and create other jobs for which the unemployed are unqualified
Term

structural unemployment

Definition
unemployment due to structural changes in the economy that eliminate some jobs and create other jobs for which the unemployed are unqualified
Term
natural unemployment
Definition
unemployment caused by frictional and structural factors in the economy.  Natural unemployment rate=frictional unemployment rate+structural unemployment rate
Term
full employment
Definition
the condition that exists when the unemployment rate is equal to the natural unemployment rate
Term
cyclical unemployment rate
Definition
the difference between the unemployment rate and the natural unemployment rate
Term
good
Definition
anything that gives a person utility or satisfaction
Term
bad
Definition
anything that gives a person disutility or dissatisfaction
Term
land
Definition
natural resources like minerals, forests, water, and unimproved land
Term
labor
Definition
physical and mental talents that people contribute to the production process
Term
capital
Definition
consists of produced goodsd that can be used as inputs for further production, such as machinery, tools, computers, trucks, buildings, and factories
Term
entrepreneurship
Definition
particular talent that some people have for organizing the resources of land, labor, and capital to produce goods, seek new business opportunitites, and develop new ways of doing things
Term
scarcity
Definition
condition in which our wants are greater than the limited resources available to satisfy them
Term
rationing device
Definition
means of deciding who gets what quantites of the available resources and goods, ex dollar price
Term
economics
Definition
science of scarcity of science of how infdividuals and societies deal with the fact that wants are greater the limited resources available to satisfy them
Term
opportunity cost
Definition
the most highly valued opportunity or alternative forfeited when a choice is made
Term
decisions at the margin
Definition
when individuals make decisions by comparing marginal benefits to marginal costs
Term
production possibilities frontier
Definition

represents the combination of two goods that can be produced in a certain period of time under the conditions of a given state of technology and fully employed resources

Term
productive efficient
Definition
an economy is this if it is producing the max output with given resources and technology
Term
productive inefficient
Definition
if producing less than the max output with given resources and technology
Term
law of increasing opportunity costs
Definition
as more of a good is produced, the opportunity costs of producing that good increase
Term
technology
Definition
the body of skills and knowledge concerning the use of resources in production.  An advance in technology commonly refers to the ability to produce more output with a fixed amount of resources or the ability to produce the same output wiht fewer resources
Term
exchange (trade)
Definition
the process of giving up one thing for something else
Term
ex ante
Definition
phrase that means "before," as in before a trade
Term
ex post
Definition
phrase that means "after" as in after a trade
Term
terms of trade
Definition
how much of one thing is given up for how much of something else
Term
transaction costs
Definition
the costs associated with the time and effort needed to search out, negotiatie, and consummate an exchange
Term

comparative advantage

Definition
the situation where someone can produce a good at lower opportunity cost than someone else can
Term
theory
Definition
an abstract representation of the real world designed with the intent to better understand the world
Term
market
Definition
any place people come together to trade
Term
demand
Definition
the willingness and ability of buys to purchase different quantities of a good at different prices during a specific time period
Term
law of demand
Definition
as the price of a good rises, the quantity demanded of the good falls, and as the price of a good falls, the quantity demanded of the good rises
Term
ceteris paribus
Definition
a latin term meaning " all other things constant" or "nothign else changes"
Term
demand schedule
Definition
the numerical tabulation of the quantity demanded of a good at different prices.  A demand schedule is teh numerical representation of the law of demand
Term

(downward-sloping) demand curve

Definition
the graphical representation of the law of demand
Term
absolute (money) price
Definition
the price of a good in money terms
Term

relative price

Definition
the price of a good in terms of another good
Term
law of diminishing marginal utility
Definition
for a given time period, teh marginal (additional) utility or satisfaction gained by consuming equal successive units of a good will decline as the amount consumed increases
Term
own price
Definition
the price of a good. For example, if the price of oranges is one dollar, this is its own price
Term
normal good
Definition
a good the demand for which rises (falls) as income rises (falls)
Term
inferior good
Definition

a good the demand for which falls (rises) as income rises (falls)

Term
neutral good
Definition
a good the demand for which does not change as income rises or falls
Term
substitutes
Definition
two goods that satisfy similar needs or desires.  If two goods are substitutes, the demand for one rises as the price of the other rises (or the demand for one falls as the price of the other falls)
Term

complements

Definition
two goods that are used jointly in consumption.  if two goodsd are complements, the demand for one rises as the price of the other falls (or the demand for one falls as the price of the other rises)
Term
supply
Definition
the willingness and ability of sellers to produce an doffer to sell different quantities of a good at diff prices during a specific time period
Term

law of supply

Definition
as the price of a good rises, the quantity supplied of the good rises, and as the price of a glld falls, the quantity supplied of the good falls
Term
(supward-sloping) supply curve
Definition

this graphical representation of the law of supply

 

Term
supply-schedule
Definition
the numerical tabulation of the quantity supplied of a good at different prices.  a supply schedule is the numerical representatino fo the law of supply
Term
subsidy
Definition
a monetary payment by government to a producer of a good or service
Term

equilibrium quaintity

Definition
the quantity that corresponds to equilibrium price.  The quantity at which the amount of  the good that buyers are willing and able to buy equals the amount that sellers are willing and able to sell, and both equal the amount actually bought and sold
Term

disequilibrium

Definition

a state of either surplus or shortage in a market

Term
equilibrium
Definition
the price quantity combination from which there is no tendency for buyers or sellers to move away. 
Term

gdp

Definition
the total market value of all final goods and services produced annually within a country's borders
Term
value added
Definition
the dollar value contributed to a final good at each stage of production
Term
transfer payment
Definition
a payment to a person that is not made in return for goods and services currently supplied
Term
fixed investment
Definition
business purchases of capital goods such as machinery andf actories, and purchases of new residential housing
Term
business cycle
Definition
recurrent swings in real gdp
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