ECON 225, Edinboro University, Dr. Shuang Feng.
Book: Macroeconomics Today, Schiller, CH 5-12
Terms : Hide Images
| 2724215390 | major macro outcomes | output, prices, jobs, and international balances. | 0 | |
| 2724216058 | major macro determinates | internal market forces, external shocks, and policy levers | 1 | |
| 2724223115 | Long-run AS | is vertical at the "natural" rate of output. | 2 | |
| 2724232398 | Say's Law | supply creates its own demand/Self-Regulating Economy, Classical economics | 3 | |
| 2724333418 | reasons AS slopes upward | Profit effect, Cost effect | 4 | |
| 2724336497 | reasons AD slopes downward | Real balances effect, Foreign trade effect, Interest rate effect | 5 | |
| 2724710111 | disposable income | = consumption + saving | 6 | |
| 2724711725 | APC | Average Propensity to Consume |  | 7 |
| 2724714089 | MPC | Marginal Propensity to Consume |  | 8 |
| 2724714848 | MPS | Marginal Propensity to Save |  | 9 |
| 2724716331 | determinants of consumption | Autonomous consumption. Income-dependent consumption. | 10 | |
| 2724719495 | consumption function | C = a + b*YD (current consumption (C)= autonomous consumption(a) + marginal propensity to consume (b) * disposable income (YD) | 11 | |
| 2724730506 | AD shifts in response to: | Income. Expectations Wealth. Credit conditions. Tax policy. | 12 | |
| 2724745577 | determinants of investment spending | interest rates, expectations of future sales, and innovation | 13 | |
| 2725236542 | redistributive mechanics of inflation | Price Effect, Income Effect, Wealth Effect | 14 | |
| 2725249124 | weighted CPI | weighted price index for all items/total weights | 15 | |
| 2725253873 | find real GDP using GDP deflator | GDP/(GDP deflator/100) | 16 | |
| 2725257663 | convert CPI to inflation | [(CPI2 - CPI1)/ CPI1 ]* 100 | 17 | |
| 2725413673 | real interest rate | nominal interest -anticipated inflation rate= | 18 | |
| 2725520891 | adjustable-rate mortgage (ARM) | A mortgage (home loan) that adjusts the nominal interest rate to changing rates of inflation. | 19 | |
| 2725521210 | base year | The year used for comparative analysis; the basis for indexing price changes. | 20 | |
| 2725521473 | bracket creep | A situation where inflation pushes income into higher tax brackets. The result is an increase in income taxes but no increase in real purchasing power. | 21 | |
| 2725523175 | Consumer Price Index (CPI) | A measure (index) of changes in the average price of consumer goods and services. | 22 | |
| 2725524183 | core inflation rate | Changes in the CPI, excluding food and energy prices. | 23 | |
| 2725525638 | cost-of-living adjustment (COLA) | Automatic adjustments of nominal income to the rate of inflation. | 24 | |
| 2725526096 | deflation | A decrease in the average level of prices of goods and services | 25 | |
| 2725527251 | GDP deflator | A price index that refers to all goods and services included in GDP. | 26 | |
| 2725528047 | hyperinflation | Inflation rate in excess of 200 percent, lasting at least one year | 27 | |
| 2725528441 | inflation | An increase in the average level of prices of goods and services. | 28 | |
| 2725528792 | inflation rate | The annual percentage rate of increase in the average price level. | 29 | |
| 2725529540 | inflationary flashpoint | The rate of output at which inflationary pressures intensify; the point on the AS curve where slope increases sharply | 30 | |
| 2725951538 | item weight | The percentage of total expenditure spent on a specific product; used to compute inflation indexes | 31 | |
| 2725952880 | money illusion | The use of nominal dollars rather than real dollars to gauge changes in one's income or wealth | 32 | |
| 2725954811 | nominal GDP | The value of final output produced in a given period, measured in the prices of that period (current prices). | 33 | |
| 2725955274 | price stability | The absence of significant changes in the average price level; officially defined as a rate of inflation of less than 3 percent | 34 | |
| 2725956117 | real GDP | The value of final output produced in a given period, adjusted for changing prices. | 35 | |
| 2725956778 | real income | Income in constant dollars; nominal income adjusted for inflation. | 36 | |
| 2725956983 | real interest rate | The nominal interest rate minus the anticipated inflation rate. | 37 | |
| 2725957456 | relative price | The price of one good in comparison with the price of other goods. | 38 | |
| 2735947763 | business cycle | Alternating periods of economic growth and contraction. | 39 | |
| 2735948232 | growth recession | A period during which real GDP grows but at a rate below the long-term trend of 3 percent. | 40 | |
| 2735949616 | laissez faire | The doctrine of "leave it alone," of nonintervention by government in the market mechanism. | 41 | |
| 2735950195 | law of demand | The quantity of a good demanded in a given time period increases as its price falls, ceteris paribus. | 42 | |
| 2735950968 | macroeconomics | The study of aggregate economic behavior, of the economy as a whole. | 43 | |
| 2735953104 | monetary policy | The use of money and credit controls to influence macroeconomic outcomes. | 44 | |
| 2735954475 | recession | A decline in total output (real GDP) for two or more consecutive quarters. | 45 | |
| 2735955433 | supply-side policy | The use of tax incentives, (de)regulation, and other mechanisms to increase the ability and willingness to produce goods and services. | 46 | |
| 2735956800 | autonomous consumption | Consumer spending not dependent on current income. | 47 | |
| 2735957029 | average propensity to consume (APC) | Total consumption in a given period divided by total disposable income. | 48 | |
| 2735957249 | consumption | Expenditure by consumers on final goods and services. | 49 | |
| 2735957661 | consumption function | A mathematical relationship indicating the rate of desired consumer spending at various income levels. | 50 | |
| 2735958684 | disposable income | After-tax income of households; personal income less personal taxes. | 51 | |
| 2735959611 | dissaving | Consumption expenditure in excess of disposable income; a negative saving flow. | 52 | |
| 2735959999 | investment | Expenditures on (production of) new plants, equipment, and structures (capital) in a given time period, plus changes in business inventories. | 53 | |
| 2735962986 | MPS | marginal propensity to save, The fraction of each additional (marginal) dollar of disposable income not spent on consumption; 1 - MPC | 54 | |
| 2735967692 | saving | That part of disposable income not spent on current consumption; disposable income less consumption. | 55 | |
| 2735968370 | wealth effect | A change in consumer spending caused by a change in the value of owned assets. | 56 | |
| 2731106888 | AD | aggregate demand, The total quantity of output (real GDP) demanded at alternative price levels in a given time period, ceteris paribus. | 57 | |
| 2733684742 | cyclical unemployment | Unemployment attributable to a lack of job vacancies—that is, to an inadequate level of aggregate demand | 58 | |
| 2733685095 | demand-pull inflation | An increase in the price level initiated by excessive aggregate demand | 59 | |
| 2733685397 | disposable income | After-tax income of households; personal income less personal taxes. | 60 | |
| 2733686602 | equilibrium GDP | The value of total output (real GDP) produced at macro equilibrium (AS = AD) | 61 | |
| 2733686752 | full employment | The lowest rate of unemployment compatible with price stability, variously estimated at between 4 percent and 6 percent unemployment | 62 | |
| 2733687096 | full-employment GDP | The value of total market output (real GDP) produced at full employment | 63 | |
| 2733687516 | gross business saving | Depreciation allowances and retained earnings. | 64 | |
| 2733688092 | inflationary GDP gap | The amount by which equilibrium GDP exceeds full-employment GDP. | 65 | |
| 2733688365 | injection | An addition of spending to the circular flow of income. | 66 | |
| 2733688650 | leakage | Income not spent directly on domestic output but instead diverted from the circular flow—for example, saving, imports, taxes | 67 | |
| 2733689012 | MPC | The fraction of each additional (marginal) dollar of disposable income spent on consumption; the change in consumption divided by the change in disposable income. | 68 | |
| 2733689482 | multiplier | The multiple by which an initial change in aggregate spending will alter total expenditure after an infinite number of spending cycles; 1/(1 - MPC) | 69 | |
| 2733689960 | recessionary GDP gap | The amount by which equilibrium GDP falls short of full-employment GDP | 70 | |
| 2735886201 | AD excess | The amount by which aggregate demand must be reduced to achieve full- employment equilibrium after allowing for price-level changes | 71 | |
| 2735886621 | AD shortfall | The amount of additional aggregate demand needed to achieve full employment after allowing for price-level changes | 72 | |
| 2735886851 | aggregate demand | The total quantity of output (real GDP) demanded at alternative price levels in a given time period, ceteris paribus. | 73 | |
| 2735887399 | aggregate supply | The total quantity of output (real GDP) producers are willing and able to supply at alternative price levels in a given time period, ceteris paribus | 74 | |
| 2735887685 | crowding out | A reduction in private sector borrowing (and spending) caused by increased government borrowing. | 75 | |
| 2735887946 | disposable income | After-tax income of households; personal income less personal taxes. | 76 | |
| 2735888814 | equilibrium (macro) | The combination of price level and real output that is compatible with both aggregate demand and aggregate supply, AD=AS | 77 | |
| 2735889474 | fiscal policy | The use of government taxes and spending to alter macroeconomic outcomes. | 78 | |
| 2735889592 | fiscal restraint | Tax hikes or spending cuts intended to reduce (shift) aggregate demand. | 79 | |
| 2735890486 | fiscal stimulus | Tax cuts or spending hikes intended to increase (shift) aggregate demand. | 80 | |
| 2735898453 | income transfers | Payments to individuals for which no current goods or services are exchanged, such as Social Security, welfare, and unemployment benefits. | 81 | |
| 2735898663 | marginal propensity to consume (MPC) | The fraction of each additional (marginal) dollar of disposable income spent on consumption; the change in consumption divided by the change in disposable income. | 82 | |
| 2735899125 | asset | Anything having exchange value in the marketplace; wealth. | 83 | |
| 2735923831 | automatic stabilizer | Federal expenditure or revenue item that automatically responds counter cyclically to changes in national income, like unemployment benefits and income taxes | 84 | |
| 2735924285 | budget deficit | The amount by which government spending exceeds government revenue in a given time period. | 85 | |
| 2735925064 | budget surplus | An excess of government revenues over government expenditures in a given time period. | 86 | |
| 2735925354 | crowding in | An increase in private sector borrowing (and spending) caused by decreased government borrowing. | 87 | |
| 2735925556 | cyclical deficit | That portion of the budget deficit attributable to unemployment or inflation. | 88 | |
| 2735926205 | debt ceiling | An explicit, legislated limit on the amount of outstanding national debt. | 89 | |
| 2735926586 | debt service | The interest required to be paid each year on outstanding debt. | 90 | |
| 2735926943 | deficit ceiling | An explicit, legislated limitation on the size of the budget deficit. | 91 | |
| 2735927403 | deficit spending | The use of borrowed funds to finance government expenditures that exceed tax revenues. | 92 | |
| 2735928172 | discretionary fiscal spending | Those elements of the federal budget not determined by past legislative or executive commitments. | 93 | |
| 2735928509 | external debt | U.S. government debt (Treasury bonds) held by foreign households and institutions | 94 | |
| 2735929474 | fiscal year (FY) | The 12-month period used for accounting purposes; begins October 1 for the federal government. | 95 | |
| 2735935471 | internal debt | U.S. government debt (Treasury bonds) held by U.S. households and institutions. | 96 | |
| 2735937865 | liability | An obligation to make future payment; debt. | 97 | |
| 2735938188 | national debt | Accumulated debt of the federal government. | 98 | |
| 2735938428 | opportunity cost | The most desired goods or services that are forgone in order to obtain something else. | 99 | |
| 2735939033 | optimal mix of output | The most desirable combination of output attainable with existing resources, technology, and social values. | 100 | |
| 2735939375 | refinancing | The issuance of new debt in payment of debt issued earlier. | 101 | |
| 2735941145 | structural deficit | Federal revenues at full employment minus expenditures at full employment under prevailing fiscal policy. | 102 | |
| 2735941472 | Treasury bonds | Promissory notes (IOUs) issued by the U.S. Treasury. | 103 |
