Term
|
Definition
|
|
Term
|
Definition
| Its a judgement about economics |
|
|
Term
|
Definition
| A schedule or curve that shows a combo of products a consumer can purchase with a specific money income |
|
|
Term
|
Definition
| As price falls the quantaty demanded rises. and vise versa |
|
|
Term
|
Definition
| add up each indiviadual's demand curve |
|
|
Term
| Things tha change a demand curve |
|
Definition
1. Consumer preference change
2. more buyers in the marker
3. comsumers income
4. Price of related goods
5. consumer expectation |
|
|
Term
| Things that change the supply curve |
|
Definition
1. Resource price (if input prices increase so does the product)
2. Technology
3.Taxes and subsidies
4. Price of other goods
5. producers expectation
6. number of sellers |
|
|
Term
| Macroeconomics focus on two things |
|
Definition
1. Long run economic growth
2. short run fluctuation in output and unemployment |
|
|
Term
|
Definition
| Gross domestic product - mesuares the final value of goods and services produced with a country |
|
|
Term
|
Definition
| When someone is actively seeking work and cannot get a job |
|
|
Term
|
Definition
| an increase in the overall prive level |
|
|
Term
|
Definition
| unexpected change in the supply for goods or service |
|
|
Term
|
Definition
| unexpected change in the supply for goods or service |
|
|
Term
| What is the biggest determinate of economic growth? |
|
Definition
| Institution, property rights, security of contract, freedom |
|
|
Term
| What type of law system do the countries with the most economic growth have? |
|
Definition
Common law
constrained executive power |
|
|
Term
| What are the flaws on the alternitive law systems that hurt growth |
|
Definition
Cival law system
centralized government
Excecutives give special power to certain groups |
|
|
Term
| National income accountin |
|
Definition
| measures the economic performance (BEA) |
|
|
Term
|
Definition
1. All goods and service in a paricular year can only be counted once
2. Only count the value of final goods not intermediate goods
3. Non production do not count in GDP(stocks, ss payment, welfare, prive tranfers, gifts to children)
4.Reselling does not count
5.Non Marker transactions doent count like black market or drugs |
|
|
Term
|
Definition
1. Expenditure approach (all money spent buying goods)
2. Income approach ( all the income that come from production) |
|
|
Term
|
Definition
| y= C (consumption) + I (investment) + G (Government Purchase) + NX (net Export) |
|
|
Term
|
Definition
| Goods that are expected to live over three years |
|
|
Term
|
Definition
| clother, food, gas- anything that doesnt last three years |
|
|
Term
|
Definition
| Y = Wages + rent + interest + profit |
|
|
Term
|
Definition
| Net domestic Products - GDP - depreciation |
|
|
Term
|
Definition
| NDP plus income made overseas |
|
|
Term
|
Definition
| NDP - Taxes + Tranfer Payment (ss, welfare) |
|
|
Term
|
Definition
| Personal Income minus personal taxes |
|
|
Term
|
Definition
| / the growth % of a country by 70 and it tells you the time it take for GDP to double |
|
|
Term
|
Definition
| Sustaineda and ongoing growth that can cause dramtic increase in the standard of living in a lifetime - most of growth have happen in that last 200 years |
|
|
Term
|
Definition
1. Cultural arrangements Allows ordanary people to have significant time for leisure activities and sports
2. Social - Abolished fedalism, public education, no legal restriction for woman and minorirties
3. politics - tend to move to democracy |
|
|
Term
|
Definition
| (US japan europe) invent most of the advance technologies and thats costly and takes time |
|
|
Term
|
Definition
| (rest of the world) grow fast because they adopt our techonology |
|
|
Term
| 6 things that effect the rate of economic growth |
|
Definition
1. increase or decrease of natural resource
2. increase or decrease of human resource
3. increases in the stock of capital goals
4.improvements in technologies
5. household, businesses, and govt purchase the expanding output of goods and sevices
6.bto reachh full production potential the economy must be at full employment and efficiency |
|
|
Term
| Production possibilities curve |
|
Definition
| the maximus combo of products on economy can produce |
|
|
Term
| 2 ways to increase Production Possibilities |
|
Definition
1. by increasing input
2. production of output |
|
|
Term
| Equation of increased rate of growth |
|
Definition
| (new GDP - old GDP)/old GDP |
|
|
Term
| Labor force participation rate |
|
Definition
| the percentage of working age population actually in the labor force |
|
|
Term
| 5 factors that explain production growth rate |
|
Definition
1. technology
2. Quantaty of capital
3. education and training
4 and 5. Economt of sale and resource allocation |
|
|
Term
|
Definition
| to much industrilization results in pollution and climate change |
|
|
Term
|
Definition
| alternative rise and decline in the level of economic ability |
|
|
Term
|
Definition
| bottom/ lowest point in a recession |
|
|
Term
|
Definition
| National bureau of economic reseach |
|
|
Term
| What causes us to go up and down in business cycles |
|
Definition
1. Irregular innovation
2.Productivity change
3. Monetary factor (inflation)
4. Political events (war/peace treaty)
5. financial instability - asset prices increase or decrease rapidly |
|
|
Term
|
Definition
| Bureau of labor statistics ( survey ,60,000 household every month |
|
|
Term
| 3 major population groups |
|
Definition
1. People under 16 yrs old and people who are institutionalized (prison, mental, hospital, school)
2. People who are not employed and are not looking for jobs,(retiree, stay at home parents)
3. People who are able and willing to work, wether they are employed or ectivly seeking work |
|
|
Term
|
Definition
| people who are unemplyed and are not seeking work ( do not count into the labor force) |
|
|
Term
|
Definition
1. Frictional unemployment - people that are between jobs
2. structural unemplyment - people whos skills are not obsolete
3. Cyclical unemployment - people who are let go because of a decline in total spending like a recession |
|
|
Term
|
Definition
| natural rate of unemployment |
|
|
Term
|
Definition
| Actual GDP minus potential GDP |
|
|
Term
|
Definition
| for every 1% by which the actual unemployment rate exceeds the natural rate, negative GDP gap of 2% occurs |
|
|
Term
|
Definition
| Gap that it creates inflation pressures and cannot be sustained indefinitely |
|
|
Term
| Difference in Unemployment by groupd |
|
Definition
1. Age- teenages usually have higher unemployment
2. Race and ethnicity - AA and hispanic have higher unemployment
3. Occupation - low skilled oppupations have higher unemployment
4. gender - dont have much difference in unemployment
5. education - less educated people have higher unemployment |
|
|
Term
| non economic cost of unemployment |
|
Definition
| Loss of skill, self respect, morate, creates poverty, highten racial and ethnicities, reduce hope |
|
|
Term
|
Definition
| Rise in the general lever of prices and the money is worth less |
|
|
Term
|
Definition
|
|
Term
| 2 types of inflation explanation |
|
Definition
1. Demand- pull inflation = when the price goes up because more spending is done than produced - increases output
2. Cost inflation = when a supply shock cause for matirials to increase in price causing the total product to increase in price - reduces output |
|
|
Term
|
Definition
| CPI index after food and energy prices are removed |
|
|
Term
|
Definition
the purchasing power of income
normal income/price index |
|
|
Term
|
Definition
| Hurt some and benefits other because real growth is resistributed |
|
|
Term
|
Definition
| When people see inflation coming they plan in advance so redistribution effect are not as bad |
|
|
Term
|
Definition
1. Fixed income receipents - people with private pension plan not indexed to inflation
2. Saver - the value of the money they save is not as much
3.Creditors - the money they get back on their loans are not as valuable |
|
|
Term
| Who is uneffected by inflation |
|
Definition
1. Debitors - people who take out loans because the money they pay back is not as valuable and when they got it out
2. Flexible income receivers - public pension |
|
|
Term
|
Definition
| Cost of living adjustment |
|
|
Term
|
Definition
| disposable income minus consumption |
|
|
Term
|
Definition
| As disposable income rises household increase their spending |
|
|
Term
|
Definition
| The difference between disposable income and consumption |
|
|
Term
|
Definition
Average propensity to consumer
apc = comsumption/income |
|
|
Term
|
Definition
Average propensity to save
APS = Saving/Income |
|
|
Term
|
Definition
Marginal properties to consumer
MPC = c2-c1/I2-I1 |
|
|
Term
|
Definition
Marginal propersity to save
S2-S1/I2-I1 |
|
|
Term
|
Definition
One in which there is not govt or M+l trade
GDP y= C+I |
|
|
Term
|
Definition
| with not government Income - taxes = disposable income |
|
|
Term
|
Definition
| the amount of investment at each level of GDP |
|
|
Term
|
Definition
1. Saving and planned investment are uqual
2. there is no unplanned change in inventory |
|
|
Term
|
Definition
No goverment spending
y = C +I + NX |
|
|
Term
|
Definition
|
|
Term
|
Definition
| tax in a constant amount or a tax yielding the same amount of tax revanue @ each level of GDP |
|
|
Term
| Recession Expenditure GDP |
|
Definition
| The amount by which agg ex[ensitures at the full employment GDP fall short of required to achive full employment |
|
|
Term
| Enflationary expenditve GAP |
|
Definition
| the amount by which an economy agg expenditives at fuill employment GDP exceed those necessary to achive the full-employment level og GDP (can only happen for a short period of time) |
|
|
Term
|
Definition
| is in the immediate short run where prices are fixed |
|
|
Term
|
Definition
| variable price-variable output model which lets the price level and real GDP change |
|
|
Term
|
Definition
| The amount of a nations output (real GDP) then buyers to purchase at each price level |
|
|
Term
|
Definition
| a high price level means the $ you have saved cannot buy as much as you thought it would so that $ has reduced purchasing power so you will reduce spending |
|
|
Term
|
Definition
| as the price level rises this creates a higher demand for money. (consumers more money to pay bills and buy good and/or businesses need more momney to pay employees) |
|
|
Term
|
Definition
| if our price level rises foreigness will want to buy fewer US goods so US exports will fall also if our price level is high we will prefer to buy more foreign goods so US imports will rise thus reduces the quantity demanded of US goods and this hurts real GDP |
|
|
Term
|
Definition
| If you expect your future income to rise you will consume more today |
|
|
Term
|
Definition
| if there is a reduction in personal this will increase consumption |
|
|
Term
|
Definition
| schedule or a curve showing the relationship between a nations price level and real GDP that an economy can produce |
|
|
Term
|
Definition
1. Immediate short run (ISR) input prices are fixed and output price are fixed
2. Short run - input prices are fixed but output prices vary
3. long run - input prices and output prices very |
|
|
Term
|
Definition
| begins after Immediate short run output prices become flexible, also when firms change output prices they not only raise prices but they change the quantity of output supplies |
|
|
Term
| Why do we rarely see deflation |
|
Definition
1. Fear of price wars
2. People dont think recessions will last so they wait a long time until they reduce prices
3. Wage contracts
4. rorales, if you cut prices you might have to cut wages
5. Minimum wage |
|
|
Term
|
Definition
| lag between need for fiscal action and time action is taken |
|
|
Term
|
Definition
| time between when fiscal policy is announced and when action affects output, employment and price lever |
|
|
Term
|
Definition
Money is something that performs 3 function
1. Medium of exchange
2.units of account
3.store of value |
|
|
Term
|
Definition
| the ease at which an assett can be converted into the most widely accepted form of money or cash with little to no loss of purchasing power |
|
|
Term
|
Definition
| Currency and chekable deposits |
|
|
Term
|
Definition
| M1 + saving deposits + small denominated times deposit + money made mutual funds held by individuals |
|
|
Term
|
Definition
7 members
each appointed to a 14 year term staggered so 1 person leaves every 2 year |
|
|
Term
|
Definition
12
dallas, NY, richmon, san francisco, boston, philly, chicago, cleveland, mineapolis, atlanta, kansa city, st louis
can loan money at a fast rate |
|
|
Term
| 3 liabilities of Federal reserve banks |
|
Definition
1. Reserves of comm banks
2. Treasury deposit
3. Fed reserve notes outstanding |
|
|
Term
| 4 main tools to alter reserve of commercial banks |
|
Definition
1. Open market operation (omo)
2. The reserve ratio
3. The discount rate
4. The term action facility |
|
|
Term
|
Definition
| benchmark interest rate used by banks as a reference point for a wide range interest rates charged on loans to consumers and business |
|
|
Term
|
Definition
| paying for new addition to capital stock or new replacements for capital stock work |
|
|
