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Unit 4 Macroeconomics terms
Terms from chapters 9-17
49
Economics
Not Applicable
10/17/2005

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Term
Macroeconomics
Definition
The part of economic theory dealing with the economy as a whole and decision making by large units such as governments and unions.
Term
Transfer Payment
Definition
Payment for which the government receives neither goods nor services in return. Examples include Social Security, Welfare, Unemployment, and Disagility
Term
Per Capita
Definition
Per person basis; total divided by population
Term
Appropriations Bill
Definition
Legislation earmarking funds for certain purposes.
Term
Federal Budget Deficit
Definition
Excess of federal expenditures over tax and revenue collection.
Term
Entitlements
Definition
A program or benefit using established eligibility requirements to provide health, nutritional, or income suppplements to individuals. Examples include food stamps
Term
Gross Domestic Product (GDP)
Definition
Dollar value of all final goods, services, and structures produced within a country's national borders during a one-year period
Term
Consumer Price Index (CPI)
Definition
Index used to measure price changes for a market basket of frequently used consumer items.
Term
Inflation
Definition
A rise in the general level of prices
Term
Deflation
Definition
decrease in the general level of prices
Term
Federal Reserve System
Definition
privately owned, publicly controlled, central bank of the United States.
Term
Economic Growth
Definition
The expansion of a countries economy
Term
Unemployment Rate
Definition
Ratio of unemployed individuals divided by total number of persons in the civilian labor force, expressed as a percentage
Term
Misery Index
Definition
unofficial statistic that is the sum of monthly inflation and the unemployment rate; same as discomfort index.
Term
Keynesian Economics
Definition
Government spending and taxation policies suggested by John Maynard Keynes to stimulate the economy; synonymous with fiscal policies or demand-side economics.
Term
Supply-Side Economics
Definition
Economic policies designed to increase aggregate supply or shift aggregate supply curve to the right
Term
Welfare
Definition
Government or private agency programs that provide general economic and social assistance to needy individuals
Term
Poverty Threshold
Definition
annual dollar benchmark used to evaluate the money income received by families and unrelated individuals
Term
Frictional Unemployment
Definition
Unemployment caused by workers changing jobs or waiting to go to new ones.
Term
Seasonal Unemployment
Definition
Unemployment caused by annual changes in the weather or other conditions that prevail at certain times of the year
Term
Structural Unemployment
Definition
Unemployment caused by a fundamental change in the economy that reduces the demand for some workers
Term
Cyclical Unemployment
Definition
Unemployment directly related to swings in the business cycle
Term
Fiscal Policy
Definition
Use of government spending and revenuecollection measures to influence the economy
Term
Monetary Policy
Definition
Actions by the Federal Reserve System to expand or contract the money supply in order to affect the cost and availability of credit
Term
Aggregate Demand
Definition
Demand for all units in the economy. It is represented by a curve that shows the quantity of real GDP that would be purchased at each possible price level in the economy. It represents the sum of Consumer spending, Business spending, Government spending, and Net Exports
Term
Aggregate Supply
Definition
Quantity of output that firms are willing and able to produce for the economy
Term
Recession
Definition
Decline in real GDP lasting at least 2 quarters (6 months) or more
Term
Workfare
Definition
A program requiring welfare recipients to provide labor in exchange for benefits
Term
Stagflation
Definition
Combination of stagnant economic growth and inflation
Term
Progressive Tax
Definition
Tax where percentage of income paid in tax rises as level of income rises
Term
Sin Tax
Definition
relatively high tax designed to raise revenue and discourage consumption of socially undesireable product.
Term
Regressive Tax
Definition
Tax where percentage of income paid in tax goes down as income rises.
Term
Proportional Tax
Definition
Tax in which percentage of income paid in tax is the same regardless of the level of income
Term
Internal Revenue Service (IRS)
Definition
Branch of the Treasury Department that collects taxes
Term
Excise Tax
Definition
General revenue tax levied on the manufacture or sale of selected items
Term
Full Employment
Definition
Lowest sustainable unemployment rate thought possible in the economy
Term
Blue Collar Worker
Definition
Industrial or factory worker who received a wage rather than a salary
Term
White Collar Worker
Definition
clerical, business, or professional worker receiving a salary rather than a wage
Term
Tight Money Policy
Definition
Monetary policy resulting in higher interest rates and restricted access to credit; associated with contraction of the money supply
Term
Easy Money Policy
Definition
Monetary policy resulting in lower interest rates and greater access to credit; associated with an expansion of the money supply
Term
Inconvertible Fiat Money Standard
Definition
Fiat money that cannot be exchanged for gold or silver; Federal Reserve notes today.
Term
Commodity Money
Definition
Money that has an alternative use as a commodity; gunpowder, flour, corn
Term
Office of Budget and Management (OMB)
Definition
Division of the executive branch primarily responsible for assembling the budget under presidential guidelines
Term
Discount Rate
Definition
Interest rate the Federal Reserve System charges on loans to financial institutions
Term
Market Basket
Definition
Representative collection of goods and services used to compile a price index
Term
Deregulation
Definition
Relaxation or removal of government regulations on business activities
Term
Reserve Requirement
Definition
Formula used to compute the amount of a depository institution's required reserves.
Term
Unemployed
Definition
state of working for less than one hour per week for pay or profit in a non-family owned business, while being available and having made an effort to find a job during the past month
Term
FICA
Definition
Federal Insurance Contributions Act; tax levied on employers and employees to support Social Security and medicare
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