Econ final study cards 338

studied byStudied by 4 people
0.0(0)
learn
LearnA personalized and smart learning plan
exam
Practice TestTake a test on your terms and definitions
spaced repetition
Spaced RepetitionScientifically backed study method
heart puzzle
Matching GameHow quick can you match all your cards?
flashcards
FlashcardsStudy terms and definitions

1 / 337

encourage image

There's no tags or description

Looks like no one added any tags here yet for you.

338 Terms

1

Compensating Differential

A difference in wages that compensates workers for unpleasant aspects of a job.

New cards
2

Derived Demand

The demand for a factor of production that depends on the demand for the good the factor produces.

New cards
3

Economic Discrimination

The practice of paying a person a lower wage or excluding them from an occupation based on an irrelevant characteristic such as race or gender.

New cards
4

Economic Rent (Pure Rent)

The price of a factor of production that is in fixed supply.

New cards
5

Factors of Production

Labor, capital, natural resources, and other inputs used to make goods and services.

New cards
6

Human Capital

The accumulated knowledge and skills that workers acquire from education and training or from their life experiences.

New cards
7

Labor Union

An organization of employees that has a legal right to bargain with employers about wages and working conditions.

New cards
8

Marginal Product of Labor

The additional output a firm produces as a result of hiring one more worker.

New cards
9

Monopsony

A situation in which a firm is the sole buyer of a factor of production, such as labor.

New cards
10

Personnel Economics

The application of economic analysis to human resources issues.

New cards
11

Statistical Discrimination

The practice of assigning the characteristics of a group to an individual who belongs to the group.

New cards
12

Value of the Marginal Product of Labor

The change in a firm's revenue as a result of hiring one more worker.

New cards
13

Arrow Impossibility Theorem

A mathematical theorem that states no system of voting can be devised that will consistently represent the underlying preferences of voters.

New cards
14

Average Tax Rate

Total tax paid divided by total income.

New cards
15

Excess Burden

A measure of the efficiency loss to the economy that results from a tax having reduced the quantity of a good produced.

New cards
16

Lorenz Curve

A curve that shows the distribution of income by arraying incomes from lowest to highest.

New cards
17

Marginal Tax Rate

The fraction of each additional dollar of income that must be paid in taxes.

New cards
18

Median Voter Theorem

The proposition that the outcome of a majority vote is likely to represent the preferences of the voter who is in the political middle.

New cards
19

Poverty Line

A level of annual income equal to three times the amount necessary to purchase the minimum quantity of food for adequate nutrition.

New cards
20

Poverty Rate

The percentage of the population that is in poverty according to the federal definition.

New cards
21

Progressive Tax

A tax for which people with lower incomes pay a lower percentage of their income in tax than do people with higher incomes.

New cards
22

Public Choice Model

A model that applies economic analysis to government decision making.

New cards
23

Regressive Tax

A tax for which people with lower incomes pay a higher percentage of their income in tax than do people with higher incomes.

New cards
24

Rent Seeking

Attempts by individuals and firms to use government action to make themselves better off at the expense of others.

New cards
25

Tax Incidence

The actual division of the burden of a tax between buyers and sellers in a market.

New cards
26

Voting Paradox

The failure of majority voting to always result in consistent choices.

New cards
27

Business Cycle

Alternating periods of economic expansion and recession.

New cards
28

Consumption

Spending by households on goods and services, excluding new housing.

New cards
29

Economic Growth

The ability of the economy to increase the production of goods and services.

New cards
30

Expansion

The period of a business cycle during which total production and total employment are increasing.

New cards
31

Final Good or Service

A good or service purchased by a final user.

New cards
32

GDP Deflator

A measure of the price level calculated by dividing nominal GDP by real GDP and multiplying by 100.

New cards
33

Government Purchases

Spending on goods and services by local, state, and federal governments.

New cards
34

Gross Domestic Product (GDP)

The market value of all final goods and services produced in a country during a period of time.

New cards
35

Inflation Rate

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

New cards
36

Intermediate Good or Service

A good or service that is an input into another good or service.

New cards
37

Investment

Spending by firms on new factories, equipment, and by households on new houses.

New cards
38

Macroeconomics

The study of the economy as a whole, including topics such as inflation and unemployment.

New cards
39

Microeconomics

The study of how households and firms make choices and interact in markets.

New cards
40

Net Exports

Exports minus imports.

New cards
41

Nominal GDP

The value of final goods and services evaluated at current prices.

New cards
42

Price Level

A measure of the average prices of goods and services in the economy.

New cards
43

Real GDP

The value of final goods and services evaluated at base year prices.

New cards
44

Recession

The period of a business cycle during which total production and total employment are decreasing.

New cards
45

Transfer Payments

Payments by the government to households for which the government does not receive a new good or service in return.

New cards
46

Underground Economy

Buying and selling of goods and services that is concealed from the government to avoid taxes.

New cards
47

Value Added

The market value a firm adds to a product.

New cards
48

Consumer Price Index (CPI)

A measure of the average prices a typical urban family pays for goods and services.

New cards
49

Cyclical Unemployment

Unemployment caused by a business cycle recession.

New cards
50

Deflation

A decline in the price level.

New cards
51

Discouraged Workers

People available for work who have not looked for a job during the previous four weeks.

New cards
52

Efficiency Wage

An above-market wage that a firm pays to increase workers' productivity.

New cards
53

Employed

Someone who currently has a job or is temporarily away from their job.

New cards
54

Employment-Population Ratio

The percentage of the working-age population that is employed.

New cards
55

Frictional Unemployment

Short term unemployment that arises from the process of matching workers with jobs.

New cards
56

Labor Force

The sum of employed and unemployed workers in the economy.

New cards
57

Labor Force Participation

The percentage of the working-age population in the labor force.

New cards
58

Menu Costs

The costs to firms of changing prices.

New cards
59

Natural Rate of Unemployment

The normal rate of unemployment that consists of frictional and structural unemployment.

New cards
60

Nominal Interest Rate

The stated interest rate on a loan.

New cards
61

Producer Price Index (PPI)

An average of the prices received by producers of goods and services.

New cards
62

Real Interest Rate

The nominal interest rate minus the inflation rate.

New cards
63

Structural Unemployment

Unemployment that arises from a persistent mismatch between the skills of workers and the requirements of jobs.

New cards
64

Unemployed

Someone who is not currently at work but is available for work and has actively looked for work.

New cards
65

Unemployment Rate

The percentage of the labor force that is unemployed.

New cards
66

Capital

Physical assets and intellectual property used to produce goods and services.

New cards
67

Crowding Out

A decline in private expenditures as a result of an increase in government purchases.

New cards
68

Financial Intermediaries

Firms that borrow funds from savers and lend them to borrowers.

New cards
69

Financial Markets

Markets where financial securities such as stocks and bonds are bought and sold.

New cards
70

Financial System

The system of financial markets and intermediaries through which firms acquire funds from households.

New cards
71

Labor Productivity

The quantity of goods and services that can be produced by one worker or by one hour of work.

New cards
72

Long-Run Economic Growth

The process by which rising productivity increases the average standard of living.

New cards
73

Market for Loanable Funds

The interaction of borrowers and lenders that determines the market interest rate.

New cards
74

Potential GDP

The level of real GDP attained when all firms are producing at capacity.

New cards
75

Catch-Up

The prediction that the level of GDP per capita in poor countries will grow faster than in rich countries.

New cards
76

Economic Growth Model

A model that explains growth rates in real GDP per capita over the long run.

New cards
77

Foreign Direct Investment (FDI)

A firm's purchasing or building of a facility in a foreign country.

New cards
78

Foreign Portfolio Investment (FPI)

The purchase of stocks or bonds issued in another country.

New cards
79

Globalization

The process of countries becoming more open to foreign trade and investment.

New cards
80

Industrial Revolution

The application of mechanical power to production that began in England around 1750.

New cards
81

New Growth Theory

A model that emphasizes that technological change is influenced by economic incentives.

New cards
82

Patent

The exclusive legal right to produce a product for a period of 20 years.

New cards
83

Per-Worker Production Function

The relationship between real GDP per hour worked and capital per hour worked.

New cards
84

Property Rights

The rights individuals or firms have to the exclusive use of their property.

New cards
85

Rule of Law

The ability of a government to enforce the laws of the country.

New cards
86

Technological Change

A positive or negative change in the ability of a firm to produce output.

New cards
87

Aggregate Demand (AD) Curve

A curve that shows the relationship between the price level and the quantity of real GDP demanded.

New cards
88

Aggregate Expenditure

Total spending in the economy.

New cards
89

Aggregate Expenditure Model

A macroeconomic model that focuses on the short-run relationship between total spending and real GDP.

New cards
90

Autonomous Expenditure

Expenditure that does not depend on the level of GDP.

New cards
91

Cash Flow

The difference between cash revenues received by a firm and cash spending.

New cards
92

Consumption Function

The relationship between consumption spending and disposable income.

New cards
93

Inventories

Goods that have been produced but not yet sold.

New cards
94

Marginal Propensity to Consume (MPC)

The amount by which consumption spending changes when disposable income changes.

New cards
95

Marginal Propensity to Save (MPS)

The amount by which saving changes when disposable income changes.

New cards
96

Multiplier

The change in equilibrium real GDP divided by the change in autonomous expenditure.

New cards
97

Multiplier Effect

The process by which a change in autonomous expenditure leads to a larger change in real GDP.

New cards
98

Disposable Income

National income minus net taxes.

New cards
99

National Income

GDP equals disposable income plus net taxes.

New cards
100

MPC (Marginal Propensity to Consume)

Change in consumption over change in income.

New cards
robot