Term
|
Definition
| The total quantity of output demanded at alternative price levels in a given time |
|
|
Term
|
Definition
| The total quantity of output producers are willing and able to supply at alternative price levels in a given period of time |
|
|
Term
|
Definition
| Payments to individuals for which no current goods or services are exchanged like social security, welfare, and unemployment benefits |
|
|
Term
|
Definition
| The use of government taxes and spending to alter macroeconomic outcomes |
|
|
Term
|
Definition
| Tax hikes of spending cuts intended to reduce (shift) aggregate demand |
|
|
Term
|
Definition
| The combination of price level and real output that is compatible with both aggregate demand and aggregate supply |
|
|
Term
|
Definition
| The amount by which equilibrium GDP exceed of full employment GDP |
|
|
Term
|
Definition
| The amount by which equilibrium GDP falls short of full employment GDP |
|
|
Term
|
Definition
| The amount by which aggregate demand must be reduced to achieve full employment equilibrium after allowing for price-level changes |
|
|
Term
|
Definition
| The amount of additional aggregate demand needed to achieve full employment after allowing for price level changes |
|
|
Term
|
Definition
| The multiple by which an initial change in aggregate spending will alter total expenditure after an infinite number of spending cycles. 1/1(1-MPC) |
|
|
Term
| Marginal Propensity to Consume |
|
Definition
The fraction of each (marginal) dollar of disposable income spent on consumption.
Change in Consumption/Change in Disposable Income |
|
|
Term
|
Definition
After tax income of consumers
Personal Income-Personal Taxes |
|
|
Term
|
Definition
| A reduction in private sector borrowing (and spending) caused by increased government borrowing |
|
|
Term
|
Definition
| The use of borrowed funds to finance government expenditures that exceed tax revenues |
|
|
Term
|
Definition
| An excess of government revenues over government expenditures in a given time period |
|
|
Term
|
Definition
| the 12 month period used for accounting purposes; begins Oct 1st for the federal government |
|
|
Term
| Discretionary fiscal spending |
|
Definition
| those elements of the federal budget not determined by past legislative or executive commitments |
|
|
Term
|
Definition
| Federal expenditure or revenue item that automatically responds counter-cyclically to changes in national income, like unemployment benefits, income taxes |
|
|
Term
|
Definition
| Federal revenues at full employment minus expenditures at full employment under prevailing fiscal policy |
|
|
Term
|
Definition
| The most desired goods or services that are forgone in order to obtain something else |
|
|
Term
|
Definition
| An increase in private sector borrowing and spending caused by decreased government borrowing |
|
|
Term
|
Definition
| Accumulated debt of the federal government |
|
|
Term
|
Definition
| Promissory notes (IOUs) issued by the U.S. Treasury |
|
|
Term
|
Definition
| An obligation to make future payment; debt |
|
|
Term
|
Definition
| Anything have exchanged values in the market place; wealth |
|
|
Term
|
Definition
| U.S. government debt (treasury bonds) held by U.S. households and institutions |
|
|
Term
|
Definition
| U.S. Government debt (treasury bonds) held by foreign households and institutions |
|
|
Term
|
Definition
| The interest required to be paid each year on outstanding debt |
|
|
Term
|
Definition
| The most desirable combination of output attainable with existing resources, technology, and social values |
|
|
Term
|
Definition
| An explicit, legislated limitation on the size of the budget deficit |
|
|
Term
|
Definition
| An explicit, legislated limit on the amount of outstanding national debt |
|
|
Term
|
Definition
| Government Spending - Tax Revenues |
|
|
Term
|
Definition
| Cyclical Balance + Structural Balance |
|
|
Term
|
Definition
| the direct exchange of one good for another without the use of money |
|
|
Term
|
Definition
| anything generally accepted as a medium of exchange |
|
|
Term
|
Definition
| currency held by the public, plus balances in transactions accounts |
|
|
Term
|
Definition
| a blank account that permits direct payment to a third party |
|
|
Term
|
Definition
| M1 plus balances in most savings accounts and money market mutual funds |
|
|
Term
|
Definition
| The total quantity of output demanded at alternative price levels in a given time period, ceteris paribus |
|
|
Term
|
Definition
| the creation of transactions deposits by bank lending |
|
|
Term
|
Definition
| Assets held by a bank to fulfill its deposit obligations |
|
|
Term
|
Definition
| The ratio of a bank's reserves to its total transaction deposits |
|
|
Term
|
Definition
| the minimum amount of reserves a bank is required to hold; equal to required reserve ratio times transactions deposits |
|
|
Term
|
Definition
| bank reserves in excess of required reserves |
|
|
Term
|
Definition
| the number of deposit (loan) dollars that the banking system can create from $1 of excess reserves; equal to 1/required reserve ratio |
|
|
Term
|
Definition
| the use of money and credit controls to influence macroeconomic outcomes |
|
|
Term
|
Definition
| the interest rate for interbank reserve loans |
|
|
Term
|
Definition
| the federal reserve lending of reserves to private banks |
|
|
Term
|
Definition
| the rate of interest the federal reserve charges for lending reserves to private banks |
|
|
Term
|
Definition
| the choice of how (where) to hold idle funds |
|
|
Term
|
Definition
| a certificate of acknowledging a debt and the amount of interest to be paid each year until repayment; an IOU |
|
|
Term
|
Definition
| the rate of return on a bond; the annual interest payment divided by the bond's price |
|
|
Term
|
Definition
| federal reserve purchases and sales of government bonds for the purpose of altering bank reserves |
|
|
Term
|
Definition
| holding money to buy everyday goods and services (atm and debit card purchases) |
|
|
Term
|
Definition
| holding money incase of sudden emergencies. The extra money held as a safeguard against the unexpected |
|
|
Term
|
Definition
| holding money in the hope that a better financial opportunity would appear later. |
|
|
Term
| Equilibrium rate of interest |
|
Definition
| the interest rate where the quantity of money demanded in a given time period equals the quantity of money supplied |
|
|
Term
| Short term vs Long term rates |
|
Definition
| success depends on how well changes in long term interest rates mirro changes in short term interest rates |
|
|
Term
|
Definition
| when banks are nervous to lend due to volatile circumstances |
|
|
Term
|
Definition
| when a drop in interest rates fails to motivate consumers to make more credit purchases |
|
|
Term
|
Definition
| with low expectations of future profit, investors may be unimpressed by "cheap money" and decline to use the lending capacity banks make available |
|
|
Term
|
Definition
| lag time between interest rate changes and investment responses. just because interest rates lowered, businesses won't immediately respond |
|
|
Term
|
Definition
| the rate that money moves around an economy |
|
|
Term
|
Definition
| occurs when both unemployment and inflation increase simultaneously |
|
|
Term
|
Definition
| illlustrates a trade off between full employment and price stability. |
|
|
Term
|
Definition
| the point on the AS curve where inflation accelerates (what we try to avoid) |
|
|
Term
|
Definition
| the tax rate imposed on the last dollar of income. increases as more income is received |
|
|
Term
|
Definition
the percentage change in quantity supplied divided by the percentage change in tax rates
% change in quantiy supplied/% change in tax rate |
|
|
Term
|
Definition
| The alternative combination of final goods and services that could be produced in a given time period with all available resources and technology |
|
|
Term
|
Definition
| An increase in output an expansion of production possibilities |
|
|
Term
|
Definition
The value of final output produced in a given period adjusted for changing prices/
Base year: The time period used for comparative analysis the basis for indexing of price changes |
|
|
Term
|
Definition
| Change in real output from one period to another. |
|
|
Term
|
Definition
| Total GDP divided by total population average GDP |
|
|
Term
|
Definition
| All persons over age 16 who are either working for pay or actively seeking paid employment |
|
|
Term
|
Definition
| The percentage of the adult population that is employed |
|
|
Term
|
Definition
Output per unit of input
Example: Total output / Total employment |
|
|
Term
|
Definition
| The knowledge and skills possessed by the workforce |
|
|
Term
| Growth rate of total output |
|
Definition
| growth rate of labor force + growth rate of productivity |
|
|
Term
| The source of productivity gains include |
|
Definition
Higher skills
More capital
Technological advance
Improved management |
|
|
Term
|
Definition
| gross investment less depreciation |
|
|
Term
|
Definition
| A reduction in private sector borrowing caused by increased government borrowing |
|
|
Term
|
Definition
| The opposite of crowding out |
|
|
Term
|
Definition
| An increase in quantity by a constant proportion each year |
|
|
Term
|
Definition
| An increase in quantity by a constant amount each year |
|
|
Term
|
Definition
| The amount by which the value of imports exceeds the value of exports in a given time period |
|
|
Term
|
Definition
| The amount by which the value of exports exceeds the value of imports ina given time period |
|
|
Term
|
Definition
A nation that doesn’t engage in international trade
-In a closed economy, production possibilities and consumption possibilities are identical |
|
|
Term
|
Definition
| A nation that engages in international trade. |
|
|
Term
| Consumption possibilities: |
|
Definition
| The alternative combinations of goods and services that a country could consume in a given time period |
|
|
Term
|
Definition
| The ability of a country to produce a specific good at a lower opportunity cost than its trading partners |
|
|
Term
|
Definition
| The most desired goods or services that are forgone in order to obtain something else |
|
|
Term
|
Definition
The rate at which goods are exchanged; the amount of good A given up for good B in trade
-A country wont trade unless the terms of trade are superior to domestic opportunities
-The terms of trade between any two countries will lie somewhere between their respective opportunity costs in production |
|
|
Term
|
Definition
| The sale of goods in export markets at prices below domestic prices |
|
|
Term
|
Definition
| A prohibition on exports or imports |
|
|
Term
|
Definition
| A tax (duty) imposed on imported goods |
|
|
Term
|
Definition
| A limit on the quantity of a good that may be imported in a given time period |
|
|
Term
|
Definition
| The price at which the quantity of a good demanded in a given time period equals the quantity supplied |
|
|
Term
| Voluntary restraint agreement (VRA): |
|
Definition
| An agreement to reduce the volume of trade in a specific good; a voluntary quota |
|
|
