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Vocabulary chapter 20
Econ 1020
24
Economics
Undergraduate 1
10/26/2014

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Term
Aggregate Behavior
Definition
The behavior of all households and firms together
Term
Sticky Prices
Definition
Prices that do not always adjust rapidly to maintain equality supplied and equality demanded
Term
Business Cycle
Definition
The cycle of short-term ups and odwns in the economy
Term
Aggregate Output
Definition
The total quantity of goods and services produced in an economy in a given period
Term
Recession
Definition
A period during which aggregate output declines. Concentionally, a period in which aggregate output declines for two consecutive quarters.
Term
Depression
Definition
A prolonged and deep recession
Term
Expansion or boom
Definition
The period in the business cycle from a trough up to a peak during which output and emplyment grow.
Term
Contraction, recession, or slump
Definition
The period in the business cycle from a peak down to a trough during which output and employment fall.
Term
Unemployment Rate
Definition
The percentage of the labor force that is unemployed.
Term
Inflation
Definition
An increase in the overall price level.
Term
Hyperinflation
Definition
A period of very rapid increases in the overall price level. (rare)
Term
Delfation
Definition
A drecease in the overall price level.
Term
Circular Flow
Definition
A diagram showing the income recoeved and payments made by each sector of the economy.
Term
Transfer Payments
Definition
Cash payments made bby the governments to people who do not supply goods, sevices, or labor in exchange for these payments. They include Social Security Benefits, veterans' benefits, and welfare payments.
Term
Leakage
Definition
Saving by households, it is called leakage because it removes circular flow from the system
Term
Treasury bonds, notes, and bills
Definition
Promissory notes issued by the federal governmnet when it borrows money.
Term
Corporate bonds
Definition
Promissory notes issued by firms when they borrow money.
Term
Share of Stock
Definition
Financial instruments that give to the holder a share in the firm's ownership and therefore the right to share in the firm's profits.
Term
Dividends
Definition
The portion of the firm's profits that the firm pays out each period to its shareholders
Term
Fiscal Policy
Definition
Government policies concerning taxes and spending.
Term
Monetary Policy
Definition
The tools used by the Federal Reserve to control the short-term interest rate.
Term
Fine-tuning
Definition
The phrase use by Walter Heller to refer to the government's role in regulating inflation and unemployment.
Term
Stagflation
Definition
A situation of both high inflation and high unemployment
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