Studied by 2 people
M1
________ (money)- the money supply that is composed of currency, demand deposits, other liquid deposits- which includes savings deposits.
Recession
________: a period of economic downturn when output and unemployment are falling.
Bonds
________- a loan in the form of an IOU that pays interest.
Disinflation
- the process of bringing the inflation rate down.
Hyperinflation
________- high and accelerating inflation.
Inflation rate
________ (with equation)- the percentage increase in the overall level of prices per year.
inflation Inflation
Unanticipated ________ being higher than expected.
Indexation
________ (with wages)- the process of adjusting the price of a financial instrument or contract (e.g., wages) to account for changes in the value of money over time.
Expenditures
________ approach to GDP: an approach to calculating GDP by adding up aggregate spending on domestically produced final goods and services in the economy- the sum of consumer spending, investment spending, government purchases of goods and services, and exports minus imports.
Business cycle
________- the alternation between economic downturns, known as recessions, and economic upturns known as expansions.
Gross Domestic Product
________- the total value of all final goods and services produced in the economy during a given year.
Monetary Policy
________- The central banks use of changes in the quantity of money or the interest rate to stabilize the economy.
Menu
________ costs- the real cost of changing listed prices.
Federal Reserve
The Act requires the ________ to conduct monetary policy pursuant to achieving these two goals, and to report to Congress on its conduct of monetary policy twice a year.
Capita
Per ________ (GDP): the sum of gross value added by all resident producers in the economy plus any product taxes (less subsidies) not included in the valuation of output, divided by mid- year population.
Consumer price index
________ (CPI)- measures the cost of the market basket of a typical urban american family.
Deflation
________- a falling overall price level.
Chain Linking
________ (of economic data)- the method of calculating changes in real GDP.
GDP
Value added (as an approach to ________)- A way of calculating ________ by surveying firms and adding their contributions to the value to final goods and services.
Circular flow diagram
________ (in economics)- an economic model that presents how money, goods, and services move between sectors in an economic system.
Humphrey
________- Hawkins Employment Act 1978- establishes price stability and full employment as national economic policy objectives.
Inventories
________ (as GDP component)- stocks of goods and raw materials held to facilitate business operations.
Imports
________- goods and services purchased from other countries.
Underemployment Workers
________ being overqualified or looking for more hours.
Peak
________ (Business cycle): the highest point between the end of an economic expansion and the start of a contraction in a business cycle.
Private savings
________: disposable income minus consumer spending, disposable income that is not spent on consumption but rather goes into financial markets.
Depression
________: a very deep and prolonged downturn.
Stagflation
________- Combination of inflation and stagnating (or falling) aggregate output.
Structural inflation inflation
________ relating to a government's monetary policy (microeconomics) rather than to supply of and demand for goods and services.
Full employment
________: where virtually all who are able and willing to work are employed.
Stocks A share of ownership of a business
________ held by the shareholder.
yield
________ curve- ________ of fixed- interest securities plotted against the length of time.
Government Transfers
________: payments that the government makes to individuals without expecting a good or service in return.
Shoe Leather Costs
________- Increased cost of a good due to inflation.
Real GDP
________- total value of all final goods and services produced in the economy during a given year, calculated using the prices of a selected base year in order to remove the effects of price changes.
price index
Producer ________ (PPI): measure the prices of the goods and services purchased by producers.
Nominal GDP
________- the total value of all final goods and services produced in the economy during a given year, calculated with the prices current in the year in which the output is produced.
Fiscal policy
________: the use of government purchases of goods and services, government transfers, or tax policy to stabilize the economy.
Exports
________: goods and services sold to other countries.
GDP deflator
________: hows how much a change in GDP relies on changes in the price level.
Inflation
________- a rising overall price level.
Unit of account costs
________- When inflation causes money a less credible source of measurement.
price level
Aggregate ________- a measure of the overall level of prices in the economy.
National income
________ and Product Accounts (aka National Accounts)- Keep track of the flows of money among different sectors of the economy; calculated by the Bureau of Economic Analysis.
Demand
________- pull inflation: inflation that is caused by an increase in aggregate demand.
Cyclical unemployment
________: the deviation of the actual rate of unemployment from the natural rate.
Financial markets
________: the markets (banking, stock, and bond) that channel private savings and foreign lending into investment spending, government borrowing, and foreign borrowing.
Price stability
________: when the overall price level is changing only slowly if at all.
Net Exports
________ (v. exports): the difference between value of exports and the value.
inflation inflation
Cost- push ________ that is caused by a significant increase in the price of a n input with economy wide importance.
Real GDP
total value of all final goods and services produced in the economy during a given year, calculated using the prices of a selected base year in order to remove the effects of price changes
Gross National Product (GNP)
the total value of goods and services provided by a country during one year, equal to the gross domestic product plus the net income from foreign investments
Humphrey
Hawkins Employment Act 1978- establishes price stability and full employment as national economic policy objectives
Cyclical unemployment
the deviation of the actual rate of unemployment from the natural rate
demand-pull inflation
inflation that is caused by an increase in aggregate demand
Depression
a very deep and prolonged downturn
Discouraged workers
non working people who are capable of working but have given up looking for a job due to that state of the job market
Disposable income
income plus government transfers minus taxes; the total amount of household income available to spend on consumption and to save
Employment act 1946
the basic goal of the act was to provide work to those seeking it and maximize production and purchasing power
expenditures approach to GDP
an approach to calculating GDP by adding up aggregate spending on domestically produced final goods and services in the economy-the sum of consumer spending, investment spending, government purchases of goods and services, and exports minus imports
Exports
goods and services sold to other countries
Financial markets
the markets(banking, stock, and bond) that channel private savings and foreign lending into investment spending, government borrowing, and foreign borrowing
Fiscal policy
the use of government purchases of goods and services, government transfers, or tax policy to stabilize the economy
Frictional unemployment
unemployment due to the time workers spend in job search
Full employment
where virtually all who are able and willing to work are employed
Government Transfers
payments that the government makes to individuals without expecting a good or service in return
GDP deflator
hows how much a change in GDP relies on changes in the price level
value added (as an approach to gdp)
A way of calculating GDP by surveying firms and adding their contributions to the value to final goods and services
Natural rate of unemployment (also NAIRU)
the unemployment rate that arise from the effects of frictional plus structural unemployment
Net Exports (v. exports)
the difference between value of exports and the value
Peak (Business cycle)
the highest point between the end of an economic expansion and the start of a contraction in a business cycle
Per Capita (GDP)
the sum of gross value added by all resident producers in the economy plus any product taxes (less subsidies) not included in the valuation of output, divided by mid-year population
Price index
measures the cost of purchasing a given market basket in a given year, the index value is normalize so that it is equal to 100 in the selected base year
Price stability
when the overall price level is changing only slowly if at all
Private savings
disposable income minus consumer spending, disposable income that is not spent on consumption but rather goes into financial markets
Producer price index (PPI)
measure the prices of the goods and services purchased by producers
Real (v. nominal) (as general terms)
The real value is the nominal value after it has been adjusted for inflation
Real GDP growth rate
total value of all financial goods and services produced in an economy in a given year, calculated by using the prices of a selected base year in order to remove the affects of price changes
Real wage/nominal wage
the wage divided by the price level to adjust for the effects of inflation or deflation
Recession
a period of economic downturn when output and unemployment are falling
Aggregate output
the economys total production of goods and services for a given period of time
Aggregate price level
a measure of the overall level of prices in the economy
Bonds
a loan in the form of an IOU that pays interest
Note 
Flashcard (41)