Thẻ ghi nhớ: the business cycle | Quizlet

business cycle model

a model showing the increases and decreases in a nation's real GDP over time; this model typically demonstrates an increase in real GDP over the long run, combined with short-run fluctuations in output

expansion

the phase of the business cycle during which output is increasing

recession

the phase of business cycle during which output is falling

depression

a deep and prolonged recession

peak

the turning point in the business cycle between an expansion and a contraction; during a peak in the business cycle, output has stopped increasing and begins to decrease

trough

the turning point in the business cycle between a recession and an expansion; during a trough in the business cycle, output that had been falling during the recession stage of the business cycle bottoms out and begins to increase again

recovery

when GDP begins to increase following a contraction and a trough in the business cycle; an economy is considered in recovery until real GDP returns to its long-run potential level

potential layout

the level of output an economy can achieve when it is producting at full employment; when an economy is producing at its potential output, it experiences only its natural rate of unemployment, no more and no less

growth trend

the straight line in the business cycle model, which is usually upward-sloping and shows the long-run pattern of change in real GDP over time

positive output gap

the difference between actual output and potential output when an economy is producing more than full employment output; when there is a positive output gap, the rate of unemployment is less than the natural rate of unemployment and an economy is operating outside of its PPC (the production posibilities curve)

negative output gap

the difference between actual output and potential output when an economy is producing less than full employment output; when there is a negative output gap, the rate of unemployment is greater than the natural rate of unemployment and an economy is operating inside its PPC

downturn

a decline in economic activity

upturn

an increase in economic activity

expectations

beliefs about what will happen in the future

consumption

purchasing and using goods and services

balance of payments

the difference between the funds a country received and those it pays for all international transactions

GDP (Gross Domestic Product)

the total market value of all goods and services produced in a country during a given period

demand

the willingness and ability of consumers to purchase goods and services

supply

the willingness and ability of businesses to offer goods or services for sale

save

to put money aside to spend in the future

equilibrium

a state of balance, for example when supply is the same as demand

deficit

an amout of money that is smaller than is needed (e.g. when spending exceeds revenues)

surplus

an excess: a quantity that is larger than is needed

fiscal policy

government actions concerning taxation and public expenditure

monetary policy

government or central bank actions concerning the rate of growth of the money in circulation

money supply

the total amount of money available in an economy at a particular time

keynesianism

the economic theory that government monetary and fiscal policy should stimulate business activity and increase employment in a recession

slump

depression

endogenous >< exogenous

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