ECO12

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crazysparks
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250958
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ECO12
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2013-12-05 11:28:59
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ECO
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PRELIMS - ECO12 (Mr. Battung)
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  1. -increases in economic growth should enable more of everything to be produced
    -increases possibility of providing goods for all
    -more consumer goods, etc. could be equated with an increase in living standards
    -wealth generated may eventually 'trickle down' to those who are poor by means of income distribution - taxes and benefits, etc.
    BENEFITS
  2. -comes from the Ancient Greek Word "oikos" means house and "nomos" means custom or law
    ECONOMICS
  3. -is the study of the use of scarce resources to satisfy unlimited human wants and needs
    ECONOMICS
  4. -it deals on scarcity of resources on how a producer makes a best quality product with the use of limited raw materials
    ECONOMICS
  5. -the study of the economy as a whole
    MACROECONOMICS
  6. -examines the functioning of individual industries and the behavior of individual decision making units - firms and households.
    MICROECONOMICS
  7. -focuses on the determinants of total national income, deals with aggregates such as aggregate consumption and investment, and looks at the overall level of prices instead of individual prices
    MACROECONOMICS
  8. -the behavior of all households and firms together
    AGGREGATE BEHAVIOR
  9. -prices that do not always adjust rapidly to maintain equality between quantity supplied and quantity demanded
    STICKY PRICES
  10. Three of the major concerns of macroeconomics are:
    • output growth
    • unemployment
    • inflation and deflation
  11. The main measure of how an economy is doing is:
    • aggregate output
    • aggregate employment
    • aggregate price level
    • growth rate of the population
  12. -the cycle of short-term ups and downs in the economy
    BUSINESS CYCLE
  13. -the total quantity of goods and services produced in an economy in a given period
    AGGREGATE OUTPUT
  14. -a period during which aggregate output declines for two consecutive quarters
    RECESSION
  15. -a prolonged and deep recession
    DEPRESSION
  16. -the period in the business cycle from a trough up to a peak during which output and employment grow
    EXPANSION OR BOOM
  17. -the period in the business cycle from a peak down to a trough during which output and employment fall
    CONTRACTION, RECESSION, OR SLUMP
  18. -the percentage of the labor force that is unemployed
    UNEMPLOYMENT RATE
  19. -an increase in the overall price level
    INFLATION
  20. -a period of very rapid increase in the overall price level
    HYPERINFLATION
  21. -a decrease in the overall price level
    DEFLATION
  22. Macroeconomics focuses on four broad groups:
    • households
    • firms
    • the government
    • the rest of the world
  23. -a diagram showing the income received and payments made by each sector of the economy
    CIRCULAR FLOW
  24. -cash payments made by the government to people who do not supply goods, services, or labor in exchange for these payments
    -they include Social Security benefits, veterans' benefits, and welfare payments
    TRANSFER PAYMENTS
  25. Three Market Arenas
    • the goods-and-services market
    • the labor market
    • the money (financial) market
  26. Firms supply to the goods-and-services market. households, the government, and firms demand from this market.
    GOODS-AND-SERVICES MARKET
  27. In market, households supply labor and firms and the government demand labor.
    LABOR MARKET
  28. Households supply funds to this market in the expectation of earning income in the form of dividends on stocks and interest on bonds
    MONEY MARKET
  29. "Output Growth" terms
    • business cycle
    • aggregate output
    • recession
    • depression
    • expansion or boom
    • contraction, recession or boom
  30. "Money Market" terms
    • treasury bonds, notes, and bills
    • corporate bonds
    • shares of stock
    • dividends
    • fiscal policy
    • monetary policy
  31. -promissory notes issued by the federal government when it borrows money
    TREASURY BONDS, NOTES, AND BILLS
  32. -promissory notes issued by firms when they borrow money
    CORPORATE BONDS
  33. -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
    SHARES OF STOCK
  34. -the portion of the firm's profits that the firms pay out each period to its shareholders
    DIVIDENDS
  35. The Role of the Government in the Macroeconomy
    • fiscal policy
    • monetary policy
  36. -government policies concerning taxes ans dpending
    FISCAL POLICY
  37. -the tools used by the Federal Reserve to control the quantity of money, which in turn affects interest rates
    MONETARY POLICY
  38. -the period of severe economic contraction and high unemployment that began in 1929 and continued throughout the 1930s
    GREAT DEPRESSION
  39. -the phrase used by Walter Heller to refer to the government's role in regulating inflation and unemployment
    FINE-TUNING
  40. -a situation of both high inflation and high unemployment
    STAGFLATION

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