AP Midterm Flashcards

6165870309	gross domestic product (GDP)	the total market value of final goods and services produced within an economy in a given year	0
6165870310	intermediate goods	goods used in the production process that are not final goods and services	1
6165870311	real GDP	a measure of GDP that controls for changes in prices	2
6165870312	nominal GDP	the value of GDP in current dollars	3
6165870313	transfer payments	payments from governments to individuals that do not correspond to the production of goods and services	4
6165870314	net exports	exports minus imports	5
6165870315	personal disposable income	personal income that households retain after paying income taxes	6
6165870316	GDP deflator	an index that measures how the prices of goods and services included in GDP change over time	7
6165870319	depression	the common name for a severe recession	8
6165870320	Economics	Study of Scarcity	9
6165870321	Scarcity	Unlimited wants/needs but limited resources	10
6165870323	Opportunity Cost	Most desirable alternative, amount loss due to trade-off made	11
6165870324	Consumer Goods	Direct Consumption	12
6165870325	Capital Goods	Indirect Consumption	13
6165870326	Physical Capital	Human made machine/tool used to produce goods/services	14
6165870327	Human Capital	Skills/Knowledge gained by a laborer through experience/education	15
6165870328	Command (centrally-planned) Economy	Government answers the 3 economic questions.	16
6165870329	Free Market Economy (capitalism)	Individual consumers answer the 3 economic questions	17
6165870330	Production Possibilities Curve/Frontier	model showing alternative ways to use scarce resouces	18
6165870331	Productive Efficiency	Any point on the PPC	19
6165870332	Allocative Efficiency	Optimal point on the PPC based off society's needs	20
6165870333	Absolute Advantage	The producer who makes the most	21
6165870334	Comparative Advantage	The producer with the lowest opportunity cost.	22
6165870335	Four Factors of Production	Land, labor, capital, entrepreneurship	23
6165870336	Resouces	Any good used to make another goods ( often- land, labor, capital)	24
6165870337	Fiscal Policy	gov't trying to counter changes in aggregate expenditure with changes in purchases, transfer payments or taxes.	25
6165870338	Expansionary Fiscal Policy	increasing gov purchases, increasing transfers, decreasing taxes to shift AD to the right boosting real GDP	26
6165870339	Contractionary Fiscal Policy	decreasing purchases, decreasing transfers or increasing taxes shifting AD to the left, lowering PL and GDP	27
6165870340	Tax Multiplier		28
6165870341	Spending Multiplier		29
6165870342	Crowding out	decrease in investment stemming from higher interest rate caused by government purchases or borrowing	30
6165870343	Recessionary Gap		31
6165870344	Inflationary Gap		32