Term
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Definition
| Lack of enough resources to satisfy all desired uses of those resources. |
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Term
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Definition
| Land, Labor, Capital, Entrepreneurship |
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Term
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Definition
| Final goods produced for use in the production of other goods, e.g., equipment, structures |
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Term
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Definition
| The assembling of resources to produce new or improved products and technologies. |
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Term
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Definition
| The study of how best to allocate scarce resources among competing uses. |
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Term
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Definition
| The most desired goods or services that are forgone to obtain something else. |
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Term
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Definition
| The alternative combinations of final goods and services that could be produced in a given time period with all available resources and technology. |
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Term
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Definition
| Maximum output of a good from the resources used in production |
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Term
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Definition
| An increase in output (Real GDP); an expansion of production possibilities |
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Term
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Definition
| An economy that uses both market signals and government directives to allocate goods and resources |
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Term
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Definition
| An imperfection in the market mechanism that prevents optimal outcomes |
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Term
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Definition
| Government intervention that fails to improve economic outcomes |
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Term
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Definition
| The study of aggregate economic behavior, of the economy as a whole |
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Term
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Definition
| The assumption of nothing else changing |
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Term
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Definition
| The total market value of all goods and services produced within a nation's borders in a given time period |
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Term
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Definition
| The dollar value of GDP divided by total population, average GDP |
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Term
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Definition
| An increase in output (real GDP); an expansion of production possibilities |
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Term
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Definition
| Resource inputs used to produce goods and services, such as land, labor, capital, entrepreneurship |
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Term
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Definition
| The knowledge and skills possessed by the workforce |
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Term
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Definition
| Production processes that use a high ratio of capital to labor inputs |
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Term
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Definition
| Output per unit of input, such as output per labor-hour |
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Term
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Definition
| Costs (or benefits) of a market activity borne by a third party; the difference between the social and private costs (benefits) of a market activity |
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Term
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Definition
| A firm that produces the entire market supply of a particular good or service |
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Term
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Definition
| One-fifth of the population, rank-orrdered by income |
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Term
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Definition
| Any place where factors of prodcuction (e.g., land, labor, capital) are bought and sold |
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Term
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Definition
| Any place where finished goods and services are bought and sold |
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Term
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Definition
| The most desired goods or services that are forgone in order to obtain something else |
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Term
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Definition
| The ability and willingness to sell (produce) specific quantities of a good at alternative prices in a given time period, ceteris paribus |
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Term
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Definition
| The ability and willingness to buy specific quantities of a good at alternative prices in a given time period, ceteris paribus |
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Term
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Definition
| A table showing the quantities of a good a consumer is willing and able to buy at alternative prices in a given time period, ceteris paribus |
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Term
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Definition
| A curve describing the quantities of a good a consumer is willing and able to buy at alternative prices in a given time period, ceteris paribus |
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Term
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Definition
| The quantity of a good demanded in a given time period increases as its price falls, ceteris paribus |
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Term
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Definition
| Goods that substitute for each other; when the price of good x rises, the demand for good y increases, ceteris paribus |
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Term
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Definition
| Goods frequently consumed in combination; when the price of good x rises, the demand for good y falls, ceteris paribus |
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Term
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Definition
| A change in quantity demanded at any (every) given price change |
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Term
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Definition
| The total quantities of a good or service people are willing and able to buy at alternative prices in a given time period; the sum of individual demands |
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Term
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Definition
| The total quantities of a good that sellers are willing and able to sell at alternative prices in a given time period, ceteris paribus |
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Term
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Definition
| The quantity of a good supplied in a given time period increases as its price increases, ceteris paribus |
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Term
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Definition
| The price at which the quantity of a good demanded in a given time period equals the quantity suppled |
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Term
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Definition
| the use of market prices and sales to signal desired outputs (or resource allocations) |
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Term
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Definition
| Lower limit set for the price of a good |
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Term
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Definition
| The amount by which the quantity supplied exceeds the quantity demanded at a given price; excess supply |
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Term
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Definition
| The amount by which the quantity demanded exceeds the quantity supplied at a given price; excess demand |
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Term
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Definition
| Upper limit imposed on the price of a good |
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Term
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Definition
| The most desirable combination of output attainable with existing resources, technology, and social values |
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Term
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Definition
| A good or service whose consumption by one person excludes consumption by others |
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Term
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Definition
| A good or service whose consumption by one person does not exclude consumption by others |
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Term
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Definition
| An individual who reaps direct benefits from someone else's purchase (consumption) of a public good |
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Term
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Definition
| The ability to alter the market price of a good or a service |
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Term
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Definition
| Government intervention to alter market structure or prevent abuse of market power |
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Term
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Definition
| An industry in which one firm can achieve economies of scale over the entire range of market supply |
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Term
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Definition
| Payments to individuals for which no current goods or services are exchanged, like Social Security, welfare, and unemployment benefits |
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Term
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Definition
| A good or service society deems everyone is entitled to some minimal quantity of |
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Term
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Definition
| The inability of labor force participants to find jobs |
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Term
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Definition
| An increase in the average level of prices of gods and services |
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Term
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Definition
| The most desired goods or services that are forgone in order to obtain something else |
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Term
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Definition
| A Tax system in which tax rates rise as income rise |
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Term
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Definition
| A tax that levies the same rate on every dollar of income |
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Term
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Definition
| A tax system in which tax rates fall as incomes rise |
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Term
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Definition
| Government intervention that fails to improve economic outcomes |
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Term
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Definition
| Therory of public sector behavior emphasizing rational self-interest of decision makers and voters |
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Term
| National-income Accounting |
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Definition
| The measurement of aggregate economic activity, particularly national income and its components |
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Term
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Definition
| Goods or services purchased for use as input in the production of final goods or in services |
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Term
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Definition
| The increase in the market value of a product that takes place at each stage of the production process |
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Term
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Definition
| The value of final output produced in a given period, measured in the prices of that period (current prices) |
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Term
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Definition
| The value of final output produced in a given period, adjusted for changing prices |
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Term
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Definition
| The year used for comparative analysis; the basis for indexing price changes |
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Term
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Definition
| An increase in the average level of prices of goods and services |
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Term
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Definition
| The consumption of capital in the production process; the wearing out of plant and equipment |
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Term
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Definition
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Term
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Definition
| Expenditures on (Production of) new plant, equipment, and structures (capital) in a given time period, plus changes in business inventories |
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Term
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Definition
| Total investment expenditure in a given time period |
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Term
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Definition
| Gross investment less depreciation |
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Term
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Definition
| Goods and services sold to international buyers |
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Term
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Definition
| Goods and services purchased from international sources |
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Term
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Definition
| The value of exports minus the value of imports |
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Term
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Definition
| Total income earned by current factors of production: GDP less depreciation, plus net foreign factor income |
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Term
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Definition
| Income received by households before payment of personal taxes |
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Term
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Definition
| After tax income of households personal income less personal taxes |
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Term
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Definition
| That part of disposable income not spent on current consumption; disposable income less consumption |
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Term
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Definition
| All persons age 16 and over who are either working for pay or actively seeking paid employment |
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Term
| Labor-Force Participation Rate |
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Definition
| The percentage of the working-age population working or seeking employment |
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Term
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Definition
| The inability of labor-force participants to find jobs |
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Term
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Definition
| 1 percent more unemployment results in 2 percent less output |
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Term
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Definition
| An individual who isn't actively seeking employment but would look for or accept a job if one were available |
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Term
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Definition
| People seeking full time paid employment who work only part time or are employed at jobs below their capability |
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Term
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Definition
| Unemployment due to seasonal changes in employment or labor supply |
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Term
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Definition
| Brief periods of unemployment experienced by people moving between jobs or into the labor market |
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Term
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Definition
| Unemployment caused by a mismatch between the skills (or location) of job seekers and the requirements (or location) of available jobs |
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Term
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Definition
| Unemployment attributable to a lack of job vacancies, that is, to an inadequate level of aggregate demand |
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Term
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Definition
| The lowest rate of unemployment compatible with price stability; variously estimated at between 4 and 6 percent |
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Term
| Natural Rate of Unemployment |
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Definition
| Long-term rate of unemployment determined by structural forces in labor and product markets |
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Term
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Definition
| The relocation of production to foreign countries |
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Term
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Definition
| An increase in the average level of prices of goods and services |
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Term
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Definition
| A decrease in the average level of prices of goods and services |
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Term
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Definition
| The price of one good in comparison with the price of other goods |
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Term
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Definition
| The amount of money income received in a given time period, measured in current dollars |
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Term
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Definition
| Income in constant dollars; nominal income adjusted for inflation |
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Term
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Definition
| Inflation rate in excess of 200 percent, lasting at least 1 year |
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Term
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Definition
| The movement of taxpayers into higher tax brackets (rates) as nominal incomes grow |
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Term
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Definition
| A measure of changes in average price of consumer goods and services |
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Term
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Definition
| The annual percentage rate of increase in the average price level |
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Term
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Definition
| The year used for comparative analysis: the basis for indexing, for example, of price changes |
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Term
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Definition
| The percentage of total expenditure spent on a specific product; used to compute inflation indexes |
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Term
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Definition
| Changes in the CPI excluding food and energy prices |
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Term
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Definition
| A price index that refers to all goods and services included in GDP |
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Term
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Definition
| The absence of significant changes in the average price level; officially defined as a rate of inflation of less than 3 percent |
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Term
| Cost Of Living Adjustment COLA |
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Definition
| Automatic adjustments of nominal income to the rate of inflation |
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Term
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Definition
| The nominal interest rate minus the anticipated inflation rate |
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Term
| Adjustable rate Mortgage (ARM) |
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Definition
| A mortgage (Home Loan) that adjusts the nominal interest rate to changing rates of inflation |
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Term
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Definition
| Alternating periods of economic growth and contraction |
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Term
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Definition
| The doctrine of "leave it alone," of nonintervention by government in the market mechanism |
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Term
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Definition
| Supply creates its own demand. Whatever was produced would be sold. All workers who sought employment would be hired. Unsold goods and unemployed labor could emerge in this belief but both would disappear as soon as people had time to adjust to prices and wages. |
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Term
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Definition
| A decline in total output (real GDP) for two or more consecutive quarters |
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Term
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Definition
| A period during which the real GDP grows, but at a rate below the longterm trend of 3 percent |
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Term
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Definition
| The total quantity of output (real GDP) demanded at alternative price levels in a given time period, ceteris paribus |
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Term
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Definition
| The total quantity of output (real GDP) producers are willing and able to supply at alternative price levels in a given time period, ceteris paribus |
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Term
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Definition
| The combination of price level and real output that is compatible with both aggregate demand and aggregate supply |
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Term
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Definition
| The total market value of final goods and services that could be produced in a given time period at full employment; potential GDP |
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Term
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Definition
| The use of government taxes and spending to alter macroeconomic outcomes |
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Term
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Definition
| The use of money and credit controls to influence macroeconomic outcomes |
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Term
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Definition
| The use of tax incentives, (de)regulation, and other mechanisms to increase the ability and willingness to produce goods and services |
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Term
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Definition
| Expenditure by consumers on final goods and services |
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Term
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Definition
| That part of disposable income not spent on current consumption; disposable income less consumption |
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Term
| Average Propensity to Consume APC |
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Definition
Total Consumption in a given time period divided by total disposable income.
APC=Total Consumption/Total Disposable Income |
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Term
| Marginal Propensity to Consume MPC |
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Definition
The fraction of each additional (marginal) dollar of disposable income spent on consumption; the change in consumption divided by the change in disposable income
MPC=Change in Consumption/Change in Disposable Income |
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Term
| Marginal Propensity to Save MPS |
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Definition
The fraction of each additional (marginal) dollar of disposable income not spent on consumption
MPS=1-MPC |
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Term
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Definition
| A change in consumer spending caused by a change in the value of owned assets |
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Term
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Definition
| A mathematical relationship indicating the rate of desired consumer spending at various income levels |
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Term
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Definition
| Consumption expenditure in excess of disposable income; a negative saving flow |
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Term
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Definition
| The value of total output (real gdp) produced at macro equilibrium (AS=AD) |
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Term
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Definition
| The amount by which equilibrium GDP falls short of full-employment GDP |
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Term
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Definition
| The amount by which equilibrium GDP exceeds full employment GDP |
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Term
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Definition
| An increase in the price level initiated by excessive aggregate demand |
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Term
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Definition
| Depreciation allowances and retained earnings |
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Term
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Definition
| An addition of spending to the circular flow of income |
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Term
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Definition
| The multiple by which an initial change in spending will alter total expenditure after an infinite number of spending cycles; 1/(1-MPC) |
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