| 395175976 | Economics | the social science that studies the choices that individuals, businesses, governments, and entire societies make as they cope with scarcity and the incentives that influence these choices | | 0 |
| 395175977 | Microeconomics | the study of the choices that individuals and businesses makeand the way these choices interact and are influenced by governments | | 1 |
| 395175978 | Macroeconomics | the study of the aggregate (or total) effects on the national economy and the global economy of the choices that individuals, businesses, and governments make | | 2 |
| 395175979 | Scarcity | the condition that arises because wants exceed the ability of resources to satisfy them | | 3 |
| 395175980 | Marginal Benefit | the benefit that arises from a one-unit increase in an activity; the marginal benefit of something is measured by what you are willing to give up to get one additional unit of it | | 4 |
| 395175981 | Marginal Cost | the opportunity cost that arises from a one-unit increase in an activity; the marginal cost of something is what you must give up to get one additional unit of it | | 5 |
| 396913412 | Tradeoff | must give up something to get something else | | 6 |
| 396913413 | Opportunity Cost | the best thing you must give up to get an item | | 7 |
| 396913414 | Factors of Production | Land, Capital, Labor, Entrepreneurship | | 8 |
| 396913415 | Sunk Cost | a previously incurred and irreversible cost | | 9 |
| 396913416 | Human Capital | the knowledge and shill that people obtain from education, on-the-job training, and work experience | | 10 |
| 396913417 | Ceteris Paribus | other things remaining the same | | 11 |
| 396913418 | Physical Capital | the funds that firms use to buy and operate physical capital | | 12 |
| 396913419 | Physical Capital | the tools, instruments, machines, buildings, and other items that have been produced in the past and that are used to produce goods and services | | 13 |
| 396945114 | Rational Choice | looking at all possible resources first before making a decision | | 14 |
| 396945115 | Factor Market | markets in which the services of factors of production are bought and sold | | 15 |
| 396945116 | Product Market | markets in which goods and services are bought and sold | | 16 |
| 396945117 | Income | Rent, wages, interest, and profit | | 17 |
| 396945118 | Market | any arrangement that brings buyers and sellers together and enables them to get information and do business with each other | | 18 |
| 396945119 | Change in demand | shift on the DS curve | | 19 |
| 396945120 | Change in quantity demanded | movement on DS curve | | 20 |
| 396945121 | Inferior Goods vs. Normal Goods | higher the income, the more brand-name items you will buy
lower the income, the more generic items you will buy | | 21 |
| 396945122 | Market equilibrium | when the quantity demanded equals the quantity supplied - when buyers' and sellers' plans are in balance | | 22 |
| 396945123 | Shortage | below equilibrium | | 23 |
| 396945124 | Surplus | above equilibrium | | 24 |
| 396945125 | Price ceiling | the highest price at which it is legal to trade a particular good, service, or factor of production | | 25 |
| 396945126 | Price floor | the lowest price at which it is legal to trade a particular good, service, or factor of production | | 26 |
| 396945127 | Business Cycle | different phases of the economy - expansion, peak, recession, trough | | 27 |
| 396945128 | Gross Domestic Product (GDP) | the market value of all the final goods and services produced within a country in a given time period | | 28 |
| 396945129 | Final goods and services | a good that is produced for its final user and not as a component of another good or service | | 29 |
| 396945130 | Intermediate goods and services | a good or service that is used as a component of a final good or service | | 30 |
| 396945131 | Investment | the purchase of new capital and additions to inventories | | 31 |
| 396945132 | Transfer payments | financial aid, welfare | | 32 |
| 396945133 | Expenditure Approach | C + I + G + NX
consumption expenditure + investment + gov. expenditures + net exports of goods and services | | 33 |
| 396945134 | Income Approach | wages for labor services + interest for the use of capital, rent for the use of land + profits for entrepreneurship | | 34 |
| 396945135 | Real GDP | compared to base year | | 35 |
| 396945136 | Nominal GDP | compared to same year | | 36 |
| 396945137 | Standard of Living | The level of consumption of goods and services that people enjoy, on the average, measured by average income per person | | 37 |
| 396945138 | Real GDP per person | real GDP divided by the population | | 38 |
| 396945139 | Consumer Price Index | a measure of the average of the prices paid by urban consumers for a fixed market basket of consumption goods and services | | 39 |
| 396960417 | GDP deflator | nominal GDP divided by real GDP multiplied 100 | | 40 |
| 396960418 | Inflation Rate | the percentage change in the price level from one year to the next | | 41 |
| 396960419 | Frictional unemployment | workers in between jobs; normal sort of unemployment | | 42 |
| 396960420 | Structural unemployment | arises when the job changes; maybe from technology | | 43 |
| 396960421 | Seasonal unemployment | short term employment during specific times of the year | | 44 |
| 396960422 | Cyclical unemployment | business slows down; workers are laid off | | 45 |
| 396960423 | Labor force | people employed and unemployed | | 46 |
| 396960424 | Full employment | the lowest possible unemployment rate with the economy growing and all factors of production being used as efficient as possible | | 47 |
| 396960425 | Potential GDP | the level of real GDP that the economy would produce if it were at full employment | | 48 |
| 396960426 | Unemployment rate | the percentage of the people in the labor force who are unemployed
number of people unemployed/ labor force x 100 | | 49 |
| 396960427 | Classical macroeconomics | a body of theory about how a market economy works and why it experiences economic growth and fluctuations | | 50 |
| 396960428 | Keynesian macroeconomics | theory about how a market economy works that stresses the need for active government intervention to achieve full employment growth | | 51 |
| 396960429 | Demand for labor | the relationship between the quantity of labor demanded and real wage rate when all other influences on firms' hiring plans remain the same | | 52 |
| 396960430 | Efficiency wage | a real wage rate that is set above the full-employment equilibrium wage rate to induce greater work effort | | 53 |
| 396960431 | Union wage | a wage rate that results from collective bargaining between a labor union and a firm | | 54 |
| 396969638 | Labor Productivity | the quantity of real GDP produced by one hour of labor
equation:
(real GDP/ aggregate hours) | | 55 |
| 396969639 | Rule of 70 | 70 divided by the annual percentage growth rate of the variable | | 56 |
| 396969640 | Economic Growth Rate of Real GDP | ((real GDP in current year - real GDP in previous year)/real GDP in previous year) x 100 | | 57 |
| 396969641 | Economic freedom | precondition for economic growth
people are able to make personal choices and are free to buy and sell in markets | | 58 |
| 396969642 | Property rights | the social arrangements that govern the protection of private property | | 59 |
| 396969643 | Demand for loanable funds | the relationship between the quantity of loanable funds demanded and the real interest rate when all other influences on borrowing plans remain the same | | 60 |
| 396969644 | Supply for loanable funds | the relationship between the quantity of loanable funds supplied and the real interest rate when all other influences on lending plans remain the same | | 61 |
| 396969645 | Money | any commodity or token that is generally accepted as a means of payment | | 62 |
| 396969646 | Functions of money | medium of exchange, unit of account, store of value | | 63 |
| 396983349 | M1 | currency held by individuals and businesses and traveler's checks plus checkable deposits owned by individuals and businesses | | 64 |
| 396983350 | M2 | M1 plus savings deposits and small time deposits, money market funds, and other deposits | | 65 |
| 396983351 | Federal Reserve System ( the Feds!) | the central bank of the U.S. | | 66 |
| 396983352 | FOMC (Federal Open Market Committee) | the Fed's main policy-making committee | | 67 |
| 396983353 | Open market operations | the purchase or sale of government securities by the NY Fed in the open market | | 68 |
| 396983354 | Monetary base | the sum of coins, Federal Reserve notes, and banks' reserves at the Fed | | 69 |
| 396983355 | Discount rate | the interest rate at which the Fed stands ready to lend reserves to commercial banks | | 70 |
| 396983356 | Reserve requirement | the minimum percentage of deposits that the Fed requires banks and other financial institutions to hold in reserves | | 71 |
| 396983357 | Federal Funds Rate | the interest rate on interbank loans | | 72 |
| 396983358 | Demand for money | the relationship between the quantity of money demanded and the nominal interest rate, when all other influences on the amount of money that people wish to hold remain the same | | 73 |
| 396983359 | Supply for money | the relationship between the quantity of money supplied and the nominal interest rate | | 74 |
| 396983360 | Hyperinflation | inflation at a rate that exceeds 50 percent a month | | 75 |
| 396983361 | Aggregate demand | the relationship between the quantity of real GDP demanded and the price level when all other influences on expenditure plans remain the same | | 76 |
| 396983362 | Aggregate supply | the relationship between the quantity of real GDP supplied and the price level when all other influences on production plans remain the same | | 77 |
| 396983363 | Fiscal Policy | changing taxes, transfer payments, and government expenditures on goods and services | | 78 |
| 396983364 | Monetary Policy | Changing the quantity of money and the interest rate | | 79 |
| 396996991 | Above full-employment equilibrium | when equilibrium real GDP exceeds potential GDP | | 80 |
| 396996992 | Below full-employment equilibrium | when potential GDP exceeds equilibrium real GDP | | 81 |
| 396996993 | Inflationary Gap | a gap that exists when real GDP exceeds potential GDP and that brings a rising price level | | 82 |
| 396996994 | Recessionary Gap | a gap that exists when potential GDP exceeds real GDP and that brings a falling price level | | 83 |
| 396996995 | Induced expenditure | the components of aggregate expenditure that change when real GDP changes | | 84 |
| 396996996 | Autonomous expenditure | the components of aggregate expenditure that do not change when real GDP changes; independent | | 85 |
| 396996997 | Consumption function | the relationship between consumption expenditure and disposable income, other things remaining the same | | 86 |
| 396996998 | Marginal Propensity to Consume | the fraction of a change in disposable income that is spent on consumption - the change in consumption expenditure divided by the change in disposable income that brought it about
equation:
change in consumption expenditure/ change in disposable income | | 87 |
| 396996999 | Automatic stabilizers | features of fiscal policy that stabilize real GDP without explicit action by the government | | 88 |
| 396997000 | Budget deficit | the negative budget balance when outlays exceed tax revenues | | 89 |
| 396997001 | Federal Budget | an annual statement of the revenues, outlays, and surplus or deficit of the government of the U.S. | | 90 |
| 396997002 | Tax wedge | the gap created by a tax between what a buyer pays and what a seller receives. In the labor market, it is the gap between the before-ta wage rate and the after-tax wage rate | | 91 |
| 396997003 | Laffer Curve | the relationship between the tax rate and total tax revenue
it rises, reaches a maximum, then falls | | 92 |
| 396997004 | Discretionary fiscal policy | a fiscal policy action that is initiated by the act of Congress | | 93 |
| 396997005 | Core inflation rate | annual percentage change in the Personal Consumption Expenditure deflator excluding the prices of food and fuel | | 94 |
| 396997006 | Inflation targeting | a monetary policy strategy in which the central bank makes a public commitment to achieving an explicit inflation target and to explaining how its policy actions will achieve that target | | 95 |
| 397315992 | Labor force participation rate | labor force / working age participation x 100 | | 96 |
