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  1. Self Regulating
    Problems such as unemployment would be corrected through the working of the invisible hand and that government attempts to improve the economy's performance would be ineffective.
  2. Keynesian Economics
    Government intervention can help a depressed economy through monetary and fiscal policy.
  3. Monetary Policy
    Changes in the quantity of money.
  4. Fiscal Policy
    Changes in taxes and government spending.
  5. Recession
    Output and employment fall in many industries
  6. Expansion
    Periods or economic upturn when output and employment are rising.
  7. Business Cycle
    Short run alternation between recession and expansion.
  8. Business cycle peak
    Point at which the economy turns from expansion to recession.
  9. Business cycle trough
    Point at which the economy turns from rescission to expansion.
  10. Long run economic growth
    The sustained upward trend in the economies output over time.
  11. Inflation
    Rising overall level of prices
  12. Deflation
    Falling overall level of prices.
  13. Price stability
    When the overall level of prices does not change.
  14. Open Economy
    An economy that trades goods and services with other countries.
  15. Trade deficit
    When the value of goods and services bought from foreigners is more then the value of goods and services it sells to them.  Imports greater then exports.
  16. Trade surplus
    Exports greater then imports
  17. National Accounts
    Keeps track of the flows of money between different sectors of the economy.
  18. Consumer Spending
    Household spending on goods and services
  19. Stock
    Share in the ownership of a company held by a share holder.
  20. Bond
    Borrowing in the form of an IOU that pays interest.
  21. Government transfers
    Payments by the government to individuals for which no good or services is provided in return
  22. Disposable income
    Total amount of household income available to spend on consumption and to save
  23. Private savings
    Disposable income that is not spent on consumption.
  24. Government borrowing
    The total amount of funds borrowed by federal, state and local governments in the financial markets.
  25. Government purchases of goods and services
    Total expenditures on goods and services by federal, state and local governments
  26. Inventories
    Stocks of goods and raw materials held to facilitate business operations
  27. Investment Spending
    Spending on productive physical capital ( Machinery and construction of buildings)
  28. Final goods and services
    Goods and services sold to the final user
  29. Intermediate goods and services
    Goods and services bought by one firm, by another firm that are inputs for production of final goods and services.  Not used to calculate GDP
  30. GDP
    Total value of all final goods and services produced in the economy during a given year.
  31. Aggregate spending
    Some of consumers spending, investment spending, government purchases of goods and services and exports minus imports in the goal spending on domestically produced final goods and services in the economy.
  32. Value added
    Value of its sales minus the value of its purchases of intermediate goods and services
  33. Net Exports
    Difference between the value of exports and the value of imports
  34. Real GDP
    Total value of all final goods and services produced in the economy during a given year, calculated using prices of a selected base year.
  35. Aggregated price level
    Measure of the overall level of prices in the economy.
  36. Market basket
    Hypothetical set of consumer purchases of goods and services.
  37. Price Index
    Percentage of major types of spending such as housing transportation and groceries.
  38. Consumer price index
    Measures the cost of the market basket of a typical urban american family
  39. Producer price index
    Measures changes in the prices of goods purchased by producers.
  40. Labor force
    All of the employed and unemployed people
  41. Labor force participation rate
    Percentage of the population age 16 or older that is in the labor force
  42. Discouraged workers
    People who are able to work but have given up on looking for a job
  43. Marginally attached workers
    Would like to be employed and have looked for a job in the recent past but are not currently looking for work.
  44. Under Employed
    Number of people who work part time because they can't find full time jobs
  45. Jobless Recovery
    Period in which the real GDP growth rate is positive by the unemployment rate is still rising
  46. Frictional unemployment
    Unemployment due to the time workers spend in job search
  47. Structural unemployment
    More people are seeking jobs in a particular market then there are jobs available at the current wage rate even when the economy is at the peak of the business cycle.
  48. Efficiency wages
    Wages that employers set above the equilibrium wage rate as an incentive for better employee performance.
  49. Real Wage
    Wage rate divided by the price level
  50. Real income
    Income divided by the price level
  51. Shoe leather costs
    Increased costs of transactions caused by inflation
Card Set:
2014-02-14 21:24:36
Macro test

Macro test
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