Term
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Definition
| Fixed at the moment they enter the model. |
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Term
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Definition
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Term
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Definition
| The total income of everyone in the economy or the total expenditure on the economy's output of goods and services. |
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Term
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Definition
| The market value of all final goods and services produced within an economy in a given period of time. |
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Term
| Whats included in GDP (Pg 22) |
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Definition
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Term
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Definition
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Term
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Definition
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Term
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Definition
| Goods and Services bought by households. Divided into Durable, Nondurable, and Services. |
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Term
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Definition
| Goods bought for future use. Plants, Houses, and Increase in Inventory. |
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Term
| Business Fixed Investment |
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Definition
| Purchase of a new plant and equipment by firms. |
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Term
| Residential Fixed Investment |
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Definition
| Purchase of new housing by households and landlords. |
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Term
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Definition
| Increase in a firms inventory. A loss of inventory is negative inventory investment. |
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Term
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Definition
| Goods and Service bought by federal, state, and local governments. Does not include social security and welfare. |
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Term
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Definition
| Includes Factor Payments from the rest of the world and takes out factor payments to the rest of the world. Basically, it is the total income earned by nationals. |
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Term
| Disposable Personal Income |
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Definition
| Personal Income-Personal Tax and Non-tax Payments |
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Term
| Why is CPI better than the GDP deflator? |
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Definition
| CPI takes into account imported goods that typical consumers can consume and it does not include investment goods that we usually don't consume. |
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Term
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Definition
| PF(K,L)-WL-RK or PY-WL-RK |
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Term
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Definition
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Term
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Definition
| Rental Price*Capital or Capitol Cost |
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Term
| Marginal Product of Labor Function |
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Definition
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Term
| Marginal Product of Capitol Function |
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Definition
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Term
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Definition
| Control over the money supply. |
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Term
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Definition
| The funds people hold in their checking accounts. |
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Term
| Most Common Measure for Studying the Affects of Money on the Economy |
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Definition
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Term
| C (With regards to the money supply) |
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Definition
| Currency 715.4 Billion Dollars |
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Term
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Definition
| C + Demand Deposits, Traveler's Checks, and other checkable deposits. 1.4 Trillion Dollars. |
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Term
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Definition
| M1 + Retail Money Market Mutual Fund Balances, Saving Deposits (including money market deposit accounts), and small time deposits. 6.6 Trillion Dollars. |
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Term
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Definition
| M2 + large time deposits, repurchase agreements, Eurodollars, and institution-only money market mutual fund balances. 10 Trillion Dollars. |
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Term
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Definition
| M (money) * V (velocity) = P (price) * T (Transactions) |
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Term
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Definition
| Total number of transactions during some period of time. |
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Term
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Definition
| Price of the typical transaction. |
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Term
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Definition
| Nominal GDP which also equal PY or Deflator*Real GDP |
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Term
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Definition
| M/P, which is the amount of "stuff" that the money supply can buy. |
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Term
Money Demand Function
Read THe Money Demand Function and the Quantity Equation on pg. 85 |
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Definition
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Term
| As demand for C decreases, Velocity _____ |
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Definition
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Term
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Definition
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Term
| ex ante real interest rate |
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Definition
| The real interest rate that the borrower and the lender expect when the loan is made |
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Term
| Ex post real interest rate |
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Definition
| The real interest rate actually realized |
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