Shared Flashcard Set

Details

Econ exam 2 bled
Exam 2
39
Economics
Undergraduate 2
03/18/2014

Additional Economics Flashcards

 


 

Cards

Term
unemployment
Definition
state a person is in if he or she cannot get a job despite being willing to work
Term
inflation
Definition
an increase in the overall price level
Term
real gdp
Definition
mesures the value of final goods and services produced of a country within a year
Term
nominal gdp
Definition
totals the dollar value of all goods and services produced in a country using CPI of that year
Term
Affects of unemployment
Definition
1) High crime rates
2) Depression
3) Political unrest
Term
inflation: who benefits, who is harmed
Definition
benefit:
1)debtors
2)flexible wage earners
3)creditors with adjustable rates

Harmed:
1)savers
2)fixed income recepients
3)creditors with fixed rates
Term
demand shocks
Definition
unexpected changes in demand for goods and services
Term
supply shocks
Definition
unexpected changes in supply for goods and services
Term
types of unemployment
Definition
1)frictional
2)structural
3)cyclical
Term
frictional unemployment
Definition
workers who are searching for jobs or waiting to take jobs in the near future
Term
structural unemployment
Definition
nderlying shift in the economy that makes it difficult for certain segments of the population to find jobs. It's typically when there is a mis-match between the jobs available and the skill levels of the unemployed.
Term
positive demand shocks
Definition
situations in which demand turns out higher than expected
Term
negative demand shocks
Definition
demand is lower than expected
Term
intermediate goods
Definition
products that are purchased for resale or further processing
Term
Formula:
GDP
Definition
C+I+G+Xn=GDP
Term
shortcomings of gdp
Definition
1)ignores economic factors
2)doesn't look at distribution
3)need for constantly growing markets
Term
Different causes of business cycle: (3)
Definition
1)new products
2)monetary factors
3)productivity change
Term
okun's law
Definition
for every 1% gdp is over NAIRO= 2%
Term
consumer price index- CPI
Definition
price of market (x) divided by price of market (y) base year times 100
Term
rate of inflation
Definition
cpi(x) minus cpi(y) divided by cpi(y) times 100
Term
types of inflation (2)
Definition
1) demand pull
2)cost push
Term
demand pull
Definition
too much money chasing little supply
Term
cost push
Definition
cost of production rising
Term
nominal income
Definition
money in paycheck
Term
real income
Definition
nominal income divided by cpi= real income
Term
average propensity to consume (APC)
Definition
fraction or percent of total income that is consumed
Term
average propensity to save (APS)
Definition
fraction of total income that is saved
Term
marginal propensity to consume (MPC)
Definition
proportion or fraction of ANY change in income consumed
Term
marginal propensity to save (MPS)
Definition
fraction of ANY change in income consumed
Term
MPC and MPS always equals....
Definition
1
Term
what guides investment
Definition
profit
Term
Rules of the Roost (3)
Definition
1)small elasticity on prevention
2)small elasticity of substitution
3)not high carrying cost
Term
multiplier
Definition
how much gdp changes in changes of spending
Term
phillips curve
Definition
inverse relationship of employment and inflation
Term
injections
Definition
the purchases of capital goods also known as an investment
Term
leakages
Definition
withdraw of spending the economy's circular flow of income and expenditures
Term
why are AE charts negatively sloped?(3)
Definition
1)real balance effect
2)interest rate effect
3)form purchase effect
Term
what causes AD curve to shift? (4)
Definition
1)change in consumer spending
2)investment
3)change in government spending
4)change in net exports
Term
positive demand shocks
Definition
situations in which demand turns out higher than expected
Supporting users have an ad free experience!