Terms : Hide Images
| 9547833500 | absolute advantage | the ability to produce something more efficiently | 0 | |
| 9547833501 | capital | productive equipment or machinery | 1 | |
| 9547833502 | comparative advantage | the ability to produce something with a lower opportunity cost | 2 | |
| 9547833503 | economics | a social science that studies how resources are used and is often concerned with how resources can be used to their fullest potential | 3 | |
| 9547833504 | efficiency | using resources to their maximum potential | 4 | |
| 9547833505 | labor | all human activity that is productive | 5 | |
| 9547833506 | land | all natural resources | 6 | |
| 9547833507 | law of Increasing costs | law that states that when more of a product is initially being produced, the higher the opportunity cost will be to produce still more | 7 | |
| 9547833508 | macroeconomics | economic problems encountered by the nation as a whole | 8 | |
| 9547833509 | microeconomics | economic problems faced by individual units within the overall company | 9 | |
| 9547833510 | opportunity cost | the amount of one good that must be sacrificed to obtain an alternative good | 10 | |
| 9547833511 | positive economics | economic analysis that draws conclusions based on logical deduction or induction (value judgements are avoided) | 11 | |
| 9547833512 | production possibilities frontier | the combinations of two goods that can be produced if the economy uses all of its resources fully and efficiently | 12 | |
| 9547833513 | normative economies | economies involving value judgement | 13 | |
| 9547833514 | resource | anything that can be used to produce a good or service | 14 | |
| 9547833515 | allocative efficiency | term for resources being deployed to produce just the right amount of each product to satisfy society's wants | 15 | |
| 9547833516 | capitalism | an economic system where supply and demand determine prices | 16 | |
| 9547833517 | circular flow diagram | diagram that shows how households and firms are related by the exchange of resources and products | 17 | |
| 9547833518 | command economy | economy in which the central government dictates what will or will not be produced and who gets what | 18 | |
| 9547833519 | the law of demand | law that states that when the price of a product increases, the quantity demanded decreases, ceteris paribus | 19 | |
| 9547833520 | law of supply | law that states that when the price of a product increases, the quantity supplied increases, ceterus paribus | 20 | |
| 9547833521 | mixed economy | a blend of government commands and capitalism | 21 | |
| 9547833522 | consumption expenditures | all the goods and services sold to households | 22 | |
| 9547833523 | disposable personal income (DPI) | the income of households after taxes have been paid | 23 | |
| 9547833524 | government expenditures | goods and services sold to governments | 24 | |
| 9547833525 | gross domestic product (GDP) | dollar value of production within a nation's borders | 25 | |
| 9547833526 | gross national product (GNP) | dollar value of production by a country's citizens | 26 | |
| 9547833527 | intermediate sales | sales to firms that will incorporate the item into their final product | 27 | |
| 9547833528 | investment sales | sales to firms that will incorporate the item into their final product | 28 | |
| 9547833529 | investment expenditures | expenditures by businesses on plants and equipment plus the change in business inventories | 29 | |
| 9547833530 | national income (NI) | the income earned by households and profits earned by firms after subtracting depreciation and indirect business taxes | 30 | |
| 9547833531 | national income and product accounts (NIPA) | a comprehensive group of statistics that measures various aspects of the economy's performance | 31 | |
| 9547833532 | net exports | exports minus imports | 32 | |
| 9547833533 | personal income (PI) | income received by households | 33 | |
| 9547833534 | real GDP | GDP adjusted for the price changes | 34 | |
| 9547833535 | underground economy | all the illegal production of goods and services and legal production that does not pass through markets | 35 | |
| 9547833536 | GDP | C+I+G+X | 36 | |
| 9547833537 | GDP per capita | GDP/population | 37 | |
| 9547833538 | consumer price index (CPI) | measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services | 38 | |
| 9547833539 | cyclical unemployment | loss of jobs by individuals during a recession and the corresponding slowdown in production | 39 | |
| 9547833540 | fisher's hypothesis | Nominal Interest Rate= Real Interest Rate + Expected Inflation | 40 | |
| 9547833541 | frictional unemployment | state of being out of work because the person is in between jobs | 41 | |
| 9547833542 | GDP deflator | measure of the level of prices in the economy | 42 | |
| 9547833543 | hidden unemployment | describing those who are able to work but who are not actively seeking employment because they are discouraged about their prospects for finding employment | 43 | |
| 9547833544 | inflation | a sustained rise in most prices in the economy | 44 | |
| 9547833545 | menu cost | the misallocation of resources because of inflation | 45 | |
| 9547833546 | nonaccelerating inflation rate of unemployment | the full employment rate of unemployment; when employment falls below this rate, inflation accelerates | 46 | |
| 9547833547 | seasonal unemployment | state of being out of work because of the time of year | 47 | |
| 9547833548 | structural unemployment | state of being out of work because the economy is structured, or set up, to a person's disadvantage | 48 | |
| 9547833549 | unemployment rate | the number of unemployed persons divided by the labor force | 49 | |
| 9547833550 | CPI | (Total Cost this Period/Total Cost Base Period) x 100 | 50 | |
| 9547833551 | Inflation rate | [(this period CPI-previous period CPI)/previous period CPI] x 100 | 51 | |
| 9547833552 | GDP deflator | (GDP/Real GPD) x 100 | 52 | |
| 9547833553 | Real GDP | (GDP/GDP deflator) x 100 | 53 | |
| 9547833554 | Nominal Interest Rate | Real Interest Rate + Expected Inflation | 54 | |
| 9547833555 | Unemployment Rate | Number of unemployed/civilian labor force | 55 | |
| 9547833556 | aggregate demand | the demand for all goods and services by all households, business, governments, and foreigners | 56 | |
| 9547833557 | aggregate supply | the supply of all goods and services by all producers in the economy | 57 | |
| 9547833558 | break-even point | point where the consumption function crosses the 45 degree line and income equals spending so that saving is zero | 58 | |
| 9547833559 | business cycle | a wave of economic activity comprised of an expansion and a recession | 59 | |
| 9547833560 | classical economic theory | the predominant paradigm in economic analysis from about 1800 until 1930, based on Say's Law | 60 | |
| 9547833561 | consumption theory | the relationship between consumer spending and income | 61 | |
| 9547833562 | equilibrium price level | the price level that equates aggregate supply and aggregate demand, the average level of prices in the economy | 62 | |
| 9547833563 | equilibrium quantity | the amount of output that results in no shortage or surplus, the amount of goods and service bought and sold in the economy | 63 | |
| 9547833564 | expansion | a sustained improvement in economic activity | 64 | |
| 9547833565 | Keynesian theory | theory that opposes Classical theory by emphasizing the short run and focusing on economies that are operating below full capacity | 65 | |
| 9547833566 | marginal propensity to consume (MPC) | idea that given an extra dollar, how much is spent? | 66 | |
| 9547833567 | multiplier | an initial change in spending in the economy that will have a magnified, or multiplied, effect on income | 67 | |
| 9547833568 | recession | a sustained decline in economic activity | 68 | |
| 9547833569 | Say's Law | theory that supply creates its own demand | 69 | |
| 9547833570 | MPC | change in spending / change in income | 70 | |
| 9547833571 | Multiplier | 1/(1-MPC) | 71 | |
| 9547833572 | total change in income | Initial Change in Spending x Multiplier | 72 | |
| 9547833573 | automatic stabilizers | government policies already in place that promote deficit spending during recessions and surplus budgets during expansions | 73 | |
| 9547833574 | crowding out | the increase in interest rates and subsequent decline in spending that occurs when the government borrows money to finance a deficit | 74 | |
| 9547833575 | deficit | situation that exists when government spending exceeds tax revenues | 75 | |
| 9547833576 | fiscal policy | changes in government spending and taxes to fight recessions or inflations | 76 | |
| 9547833577 | inflationary gap | what occurs when the equilibrium quantity of output is above potential output | 77 | |
| 9547833578 | Phillips tradeoff | the inverse relationship between inflation and unemployment | 78 | |
| 9547833579 | rational expectations | the idea that households and businesses will use all the information available to them when making economic decision | 79 | |
| 9547833580 | recessionary gap | what occurs when the equilibrium quantity of output is below potential output | 80 | |
| 9547833581 | stagflation | term used to describe the situation when the economy experiences inflation and a recession simultaneously | 81 | |
| 9547833582 | surplus | spending by the government that is less than tax revenues | 82 | |
| 9547833583 | change in real GDP | Initial Change in Spending x Multiplier | 83 | |
| 9547833584 | certificate of deposit | debt instrument that is similar to a savings account except the interest rate is slightly greater and the deposit cannot be drawn on without penalty | 84 | |
| 9547833585 | currency | coins and paper money | 85 | |
| 9547833586 | discount rate | the rate of interest the FED charges when it makes loans to depository institutions | 86 | |
| 9547833587 | excess reserves | the amount of any deposit that does not have to be held aside and may be used to make loans and buy investments | 87 | |
| 9547833588 | federal reserves | the central bank of the United The United States | 88 | |
| 9547833589 | fiat money | money that is not backed by any precious commodity | 89 | |
| 9547833590 | government securities | IOUs that the government issues when it borrows money | 90 | |
| 9547833591 | liquidity | the ability to turn an asset into cash rapidly and without loss | 91 | |
| 9547833592 | M1 | currency, transaction accounts, and travelers' checks | 92 | |
| 9547833593 | M2 | M1 plus savings accounts, certificates of deposit, and other liquid assets | 93 | |
| 9547833594 | money | anything that society generally accepts in payment for a good or service | 94 | |
| 9547833595 | money multiplier | 1/reserve requirement, the multiple by which the money supply will change because of a change in bank reserves | 95 | |
| 9547833596 | open market operations | activities in which the FED buys and sells government securities in the secondary market | 96 | |
| 9547833597 | required reserves | the amount of any deposit that must be held aside and not used to make loans or buy investment | 97 | |
| 9547833598 | reserve requirement | the percentage of any deposit that must be held aside and not used to amke loans or buy investments | 98 | |
| 9547833599 | savings account | an account at a depository institution that earns interest while the funds are readily available but cannot be withdrawn with checks | 99 | |
| 9547833600 | secondary market | place where government securities that have already been issued may be bought or sold | 100 | |
| 9547833601 | transaction account | a checking account at a bank or a similar account at some other depository institution | 101 | |
| 9547833602 | money multiplier | 1/ Reserve Requirement | 102 | |
| 9547833603 | change in money supply | Money Multiplier x Change in Bank Reserves | 103 | |
| 9547833604 | board of governors | executive board of the FED that makes major monetary policy decisions | 104 | |
| 9547833605 | demand management policy | monetary and fiscal policy | 105 | |
| 9547833606 | equation of exchange | M x V = P x Q; the money supply times its velocity equals the price level times output | 106 | |
| 9547833607 | federal open market committee (FOMC) | a committee within the FED that designs and executes the particular of monetary policy | 107 | |
| 9547833608 | monetarist | one who believes that changes in the money supply have a profound effect on the economy | 108 | |
| 9547833609 | monetary neutrality | policy in which a change in the money supply would result in a proportional change in prices while real variables, such as the unemployment rate, would be unaffected | 109 | |
| 9547833610 | monetary policy | changes in the money supply to fight recessions or inflations | 110 | |
| 9547833611 | money demand | the amount that households and firms want to hold in currency and deposits | 111 | |
| 9547833612 | velocity of money | describing the number of times the typical dollar of M1 or M2 is used to make purchases during a year | 112 | |
| 9547833613 | equation of exchange | M x V = P x Q | 113 | |
| 9547833614 | capital productivity | the amount of output per unit of plant and equipment | 114 | |
| 9547833615 | economic growth | growth of output usually measured by the percentage change in real GDP or real GDP per capita | 115 | |
| 9547833616 | human capital | the skill and knowledge embodied in the labor force | 116 | |
| 9547833617 | labor productivity | the amount of output per unit of labor | 117 | |
| 9547833618 | potential GDP | the amount that can be produced using resources fully and efficiently | 118 | |
| 9547833619 | productivity | output per unit of input | 119 | |
| 9547833620 | total productivity | the amount of all inputs | 120 | |
| 9547833621 | Rule of 70 | years it takes a variable to double =70/the annual growth rate of the variable | 121 | |
| 9547833622 | appreciation | the increase of the value of a currency in terms of another currency | 122 | |
| 9547833623 | balance of payments | an accounting of the funds that flow in and out of a country comprised of the capital account and the current account | 123 | |
| 9547833624 | balance of trade | a nation's exports minus its imports | 124 | |
| 9547833625 | capital account | a portion of the balance of payments comprised of foreign purchases of US assets minus US purchases of foreign assets, plus the change in official reserves | 125 | |
| 9547833626 | closed economy | a hypothetical economy with no foreign trade | 126 | |
| 9547833627 | current account | a portion of the balance of payments comprised of the trade balance, net investment income, and net transfers | 127 | |
| 9547833628 | depreciation | the decrease of the value of a currency in terms of another currency | 128 | |
| 9547833629 | dumping | the practice or foreign producers selling a product in the domestic market for less than it cost to produce it | 129 | |
| 9547833630 | exchange rate | the value of one country's currency in terms of another's | 130 | |
| 9547833631 | gold standard | a unit of one currency that is equivalent to a stated amount of gold | 131 | |
| 9547833632 | import quota | a limit on the amount of a product that can be imported | 132 | |
| 9547833633 | import tariff | a tax on a specified import product | 133 | |
| 9547833634 | infant industries | those industries that are just getting started, perhaps requiring trade restrictions | 134 | |
| 9547833635 | intervention | situation in which a nation or group of nations uses their official reserves to supply or demand a currency in order to alter the exchange rate | 135 | |
| 9547833636 | managed float | an exchange rate regime where supply and demand determine exchange rates with occasional intervention when warranted | 136 | |
| 9547833637 | net investment income | amount US citizens earned as interest and dividends from abroad minus how much was paid to foreigners in interest and dividends | 137 | |
| 9547833638 | net transfers | money our government and citizens send as gifts or aid to foreigners minus how much foreigners send to us in gifts and aid | 138 | |
| 9547833639 | official reserves | government's holdings of foreign currencies | 139 | |
| 9547833640 | open economy | an economy with foreign trade | 140 | |
| 9547833641 | trade deficit | excess of a nation's imports over its exports | 141 | |
| 9547833642 | trade surplus | excess of a nation's exports of over its imports | 142 | |
| 9547833643 | balance of payments | current account +capital account | 143 |
