Macroeconomics: Endgame

studied byStudied by 62 people
5.0(1)
Get a hint
Hint

529 plan

1 / 90

flashcard set

Earn XP

Description and Tags

Stolen from several Quizlets

91 Terms

1

529 plan

A savings plan operated by a state or educational institution designed to help families set aside funds for future college costs

New cards
2

absolute advantage

the ability of an individual, a firm, or a country to produce more of a good or service than competitors, using the same amount of resources

New cards
3

Assets

resources owned by a business

New cards
4

barter

Exchange goods without involving money.

New cards
5

Board of Governors of the Federal Reserve System

The seven-member board that supervises the banking system of the United States

New cards
6

Bonds

A certificate issued by a government or private company which promises to pay back with interest the money (principal) borrowed from the buyer of the certificate. Example- The city issued bonds to raise money for putting in new sewers.

New cards
7

budget

A plan for making and spending money

New cards
8

business cycle

Alternating periods of economic expansion and economic recession

New cards
9

business investment

investment spending by businesses that creates additional output and jobs, including new housing and increases in inventory

New cards
10

cap and trade

a method for managing pollution in which a limit is placed on emissions and businesses or countries can buy and sell emissions allowances

New cards
11

Certificate of Deposit (CD)

An interest-earning deposit that requires the funds to remain deposited for a fixed term. Withdrawal of the funds before the term expires results in a financial penalty.

New cards
12

checking account

an account at a bank against which checks can be drawn by the account depositor.

New cards
13

Closing

in real estate, a meeting of the seller, the buyer, and the lender of funds, or representatives of each party, to complete the transaction

New cards
14

collision insurance

This covers the car of the insured person and pays for repairs after an accident or cash compensation if the car can't be repaired. This type of coverage is usually optional

New cards
15

comparative advantage

the ability of an individual, a firm, or a country to produce a good or service at a lower opportunity cost than competitors

New cards
16

compound interest

interest earned on both the principal amount and any interest already earned

New cards
17

comprehensive insurance

covers your car for reasons other than a collision, such as theft, fire, vandalism

New cards
18

Consumer Price Index (CPI)

a measure of the overall cost of the goods and services bought by a typical consumer

New cards
19

consumption

spending by households on goods and services, with the exception of purchases of new housing

New cards
20

contractionary fiscal policy

Fiscal policy used to decrease aggregate demand or supply. Deliberate measures to decrease government expenditures, increase taxes, or both. Appropriate during periods of inflation.

New cards
21

Credit Report

a report on a person's creditworthiness that includes identifying information, credit cards, late payments, bankruptcies, and savings balances

New cards
22

Credit Score

a number assigned to a person that indicates to lenders their capacity to repay a loan. 300-900 (a higher score is better)

New cards
23

cyclical unemployment

unemployment that rises during economic downturns and falls when the economy improves

New cards
24

Deductible

Amount you must pay before you begin receiving any benefits from your insurance company

New cards
25

Deflation

A situation in which prices are declining

New cards
26

diminishing marginal returns

a level of production in which the marginal product of labor decreases as the number of workers increases

New cards
27

Diversification

Spreading out investments to reduce risk

New cards
28

double coincidence of wants

the unlikely occurrence that two people each have a good the other wants

New cards
29

excess reserves

reserves that banks hold over and above the legal requirement

New cards
30

expansion

A period of economic growth as measured by a rise in real GDP

New cards
31

expansionary fiscal policy

An increase in government purchases of goods and services, a decrease in net taxes, or some combination of the two for the purpose of increasing aggregate demand and expanding real output

New cards
32

Federal Reserve

the central bank of the United States

New cards
33

financial risk

uncertainty about future outcomes that involve financial losses and gains

New cards
34

fiscal policy

the use of government spending and revenue collection to influence the economy

New cards
35

FOMC (Federal Open Market Committee)

12 Member group that buys and sells US gov. securities to influence the money supply.

New cards
36

Foreclosure

The seizure of property from borrowers who are unable to repay their loans

New cards
37

frictional unemployment

A type of unemployment caused by workers voluntarily changing jobs and by temporary layoffs; unemployed workers between jobs.

New cards
38

full employment

the level of employment reached when there is no cyclical unemployment; around 4%

New cards
39

GDP formula

Y=C+I+G+NX

New cards
40

Government Spending

spending by all levels of government on final goods and services

New cards
41

Gross Domestic Product (GDP)

A measurement of the total goods and services produced within a country.

New cards
42

Growth Funds

mutual funds that focus on stocks that have potential for above-average growth

New cards
43

hyper inflation

Extremely rapid inflation. This was seen in post- Treaty of Versailles Europe, such as Germany. Countries printed money to pay off bills. This resulted in a massive wave of inflation. Over 50% per month.

New cards
44

Index Fund

A mutual fund that tries to match the performance of a particular index, like the S & P 500, by investing in the companies included in that index.

New cards
45

inflation rate

the percentage increase in the price level from one year to the next

New cards
46

inflation risk

The danger that money won't be worth as much in the future as it is today

New cards
47

Inflation

a general increase in prices and fall in the purchasing value of money.

New cards
48

inside lag

a delay between the onset of a problem and the implementation of a solution

New cards
49

insurance

protection against possible financial loss

New cards
50

Liabilities

what a company owes

New cards
51

liability insurance

insurance that provides protection from claims arising from injuries or damage to other people or property

New cards
52

marginal benefit

the extra benefit of adding one unit

New cards
53

marginal cost

the cost of producing one more unit of a good

New cards
54

Marginal Principle

you should continue an activity as long as the marginal benefit is greater than the marginal cost

New cards
55

market economy

economic system in which decisions on production and consumption of goods and services are based on voluntary exchange in markets

New cards
56

market failure

a situation in which the free market, operating on its own, does not distribute resources efficiently

New cards
57

monetary policy

managing the economy by altering the supply of money and interest rates

New cards
58

money multiplier

the amount of money the banking system generates with each dollar of reserves

New cards
59

mortgage

a specific type of loan that is used to buy real estate

New cards
60

Mutual funds

An investment that holds a wide range of different investment instruments, providing diversification, including stocks and bonds

New cards
61

nominal value

the face value of an amount of money

New cards
62

open market operations

a tool used by the Federal Reserve to adjust the money supply by buying or selling U.S. government bonds in the financial market

New cards
63

open market purchase

The purchase of U.S. government bonds by the FED to increase the money supply

New cards
64

open market sale

the sale of US government bonds by the FED to reduce the money supply

New cards
65

opportunity cost

Cost of the next best alternative use of money, time, or resources when one choice is made rather than another

New cards
66

outside lag

the time between a policy action and its influence on the economy

New cards
67

Outsourcing

A decision by a corporation to turn over much of the responsibility for production to independent suppliers.

New cards
68

Owner's Equity

the amount remaining after the value of all liabilities is subtracted from the value of all assets

New cards
69

peak

the height of an economic expansion, when real GDP stops rising

New cards
70

Premium

an amount to be paid for an insurance policy.

New cards
71

production possibilities curve

A graph that describes the maximum amount of one good that can be produced for every possible level of production of the other good.

New cards
72

public goods

Goods, such as clean air and clean water, that everyone must share.

New cards
73

Real GDP per capita

real GDP divided by the total population of a country

New cards
74

Real GDP

GDP adjusted for inflation

New cards
75

real value

the value of an amount of money in terms of what it can buy

New cards
76

Recession

A slowdown in a nation's economy

New cards
77

reserve ratio

the fraction of deposits that banks hold as reserves

New cards
78

Roth 401(k)

an account setup at work where you make contributions with after-tax dollars, which is invested in mutual funds, and qualified distributions at retirement are received income-tax free

New cards
79

Roth IRA

A personal savings plan; contributions are not tax-deductible; earnings are tax-free

New cards
80

Rule of 72

The number of years it takes for a certain amount to double in value is equal to 72 divided by its annual rate of interest.

New cards
81

savings account

a bank account that earns interest

New cards
82

Stocks

shares of ownership in a company

New cards
83

structural unemployment

unemployment that occurs when workers' skills do not match the jobs that are available

New cards
84

Target Funds

mutual funds that automatically adjust the risk profile (from stocks to bonds) of the fund as the investor gets older

New cards
85

trade deficit

An excess of imports over exports

New cards
86

trade surplus

when a country exports more than it imports

New cards
87

transfer payments

Benefits given by the government directly to individuals. Transfer payments may be either cash transfers, such as Social Security payments and retirement payments to former government employees, or in-kind transfers, such as food stamps and low-interest loans for college education.

New cards
88

trough

the lowest point in an economic contraction, when real gross domestic product stops falling

New cards
89

two income trap

Cost of living has doubled since 1970s. Relied on both parents working to support families.

New cards
90

unemployment rate

the percentage of the labor force that is unemployed

New cards
91

voluntary exchange

the act of buyers and sellers freely and willingly engaging in market transactions

New cards

Explore top notes

note Note
studied byStudied by 14 people
Updated ... ago
5.0 Stars(1)
note Note
studied byStudied by 12 people
Updated ... ago
5.0 Stars(1)
note Note
studied byStudied by 23 people
Updated ... ago
5.0 Stars(2)
note Note
studied byStudied by 59 people
Updated ... ago
5.0 Stars(1)
note Note
studied byStudied by 3 people
Updated ... ago
5.0 Stars(1)
note Note
studied byStudied by 8 people
Updated ... ago
5.0 Stars(1)
note Note
studied byStudied by 12 people
Updated ... ago
5.0 Stars(1)
note Note
studied byStudied by 520 people
Updated ... ago
5.0 Stars(1)

Explore top flashcards

flashcards Flashcard96 terms
studied byStudied by 33 people
Updated ... ago
5.0 Stars(7)
flashcards Flashcard23 terms
studied byStudied by 3 people
Updated ... ago
5.0 Stars(1)
flashcards Flashcard96 terms
studied byStudied by 21 people
Updated ... ago
5.0 Stars(1)
flashcards Flashcard68 terms
studied byStudied by 2 people
Updated ... ago
5.0 Stars(1)
flashcards Flashcard85 terms
studied byStudied by 19 people
Updated ... ago
5.0 Stars(1)
flashcards Flashcard31 terms
studied byStudied by 7 people
Updated ... ago
5.0 Stars(2)
flashcards Flashcard20 terms
studied byStudied by 11 people
Updated ... ago
5.0 Stars(1)
flashcards Flashcard60 terms
studied byStudied by 9 people
Updated ... ago
5.0 Stars(1)