Econ ch 5
Card Set Information
Econ ch 5
econ ch 5
chapter 5 vocab
Recurring periods of growth and decline (or expansion and contraction) in an economy's real output or real GDP
Recovery, Peak, Recession, Trough
The phases of the business cycle during which real GDP or output increases, reaches its maximum, falls and reaches its minimum, respectively
Total or Aggregate Spending
The total combined spending of all units in the economy (households plush businesses plus government plus foreign) for the new goods and services.
Personal Consumption Expenditures
Household spending on new goods and services.
Household spending on new goods and services that comes from income earned from providing resources to producers.
Money from the governmnet for which no direct work is performed in returned.
Spending that is generated from sources other than household earned income.
Injections into the Spending System
Spending that comes from a source other than household earned income; nonincome-determined spending.
Organizations such as banks, credit unions, and insurance companies that provide a means for channeling saving into borrowing
Leakages from the Spending Stream
Uses for earned income other than spending, such as paying taxes and saving.
Business spending on new goods, such as machinery, equipment, buildings, and inventories; nonincome-determined spending.
The portion of a buisness' accumulated profits that has been retained for investment or other purposes.
The relationship between the amount saved by households and businesses and the amount returned to the spending stream through business and household borrowing.
Government Purchases of Goods and Services
Government spending on new goods and services; nonincome-determined spending.
Goods and services that are sold abroad
Goods and services purchased from abroad.
Exports minus imports; is positive when exports exceed imports and negative when exports exceed exports.
The change in total output and income generated by a change in nonincome-determined spending is larger than, or a multiple of, the spending change itself.
Anticipations of future events; can affect current actions by households and businesses and the likelihood that the future events will occur.
Influencing the levels of aggregate output and employment or prices through changes in federal government purchases, transfer payments and/or taxes.
Influencing the levels of aggregate output and employment or prices through changes in interest rates and the money supply.