macro unit 5 vocab test

studied byStudied by 24 people
5.0(1)
Get a hint
Hint

loanable funds market

1 / 20

21 Terms

1

loanable funds market

a hypothetical market that brings together those who want to lend money and those who want to borrow money.

New cards
2

rate of return

(on a project) is the profit earned on the project expressed as a percentage of its cost.

New cards
3

crowding out

occurs when a government deficit drives up the interest rate and leads to reduced investment spending.

New cards
4

investment tax credit

an amount that firms are allowed by law to deduct from their taxes based on their investment spending.

New cards
5

cyclically adjusted budget balence

an estimate of what the budget balance would be if real GDP were exactly equal to potential output.

New cards
6

gov’t debt

the accumulation of past budget deficits, minus past budget surpluses.

New cards
7

debt-GDP ratio

the government's debt as a percentage of GDP.

New cards
8

target federal funds rate

the Federal Reserve's desired level for the federal funds rate; the Federal Reserve can achieve this target through open market operations.

New cards
9

expansionary monetary policy

monetary policy that increases aggregate demand.

New cards
10

contractionary monetary policy

monetary policy that reduces aggregate demand.

New cards
11

taylor rule for monetary policy

rule for setting the federal funds rate that takes into account both the inflation rate and the output gap.

New cards
12

inflation targeting

when the central bank sets an explicit target for the inflation rate and sets monetary policy in order to hit that target.

New cards
13

monetary neutrality

the concept that changes in the money supply have no real effects on the economy.

New cards
14

monetarism

asserts that GDP will grow steadily if the money supply grows steadily.

New cards
15

quantity theory of money

emphasizes the positive relationship between the price level and the money supply; relies on the velocity equation (M V = P Y).

New cards
16

velocity of money

the ratio of nominal GDP to the money supply; a measure of the number of times the average dollar bill is spent per year.

New cards
17

rule of 70

a mathematical formula that tells us that the time it takes a variable that grows gradually over time to double is approximately 70 divided by that variable's annual growth rate.

New cards
18

labor productivity

output per worker; also known simply as productivity.

New cards
19

physical capital

often referred to simply as capital—consists of manufactured (human-made) productive resources, such as equipment, buildings, tools, and machines, used to produce other goods and services.

New cards
20

human capital

the improvement in labor created by the education and knowledge that is embodied in the workforce.

New cards
21

technology

the technical means for producing goods and services.

New cards

Explore top notes

note Note
studied byStudied by 12 people
... ago
5.0(1)
note Note
studied byStudied by 26 people
... ago
5.0(1)
note Note
studied byStudied by 126825 people
... ago
4.9(606)
note Note
studied byStudied by 13 people
... ago
5.0(1)
note Note
studied byStudied by 18124 people
... ago
4.7(73)
note Note
studied byStudied by 47 people
... ago
5.0(1)
note Note
studied byStudied by 54 people
... ago
5.0(1)
note Note
studied byStudied by 672 people
... ago
4.2(5)

Explore top flashcards

flashcards Flashcard (23)
studied byStudied by 174 people
... ago
5.0(1)
flashcards Flashcard (28)
studied byStudied by 6 people
... ago
5.0(1)
flashcards Flashcard (67)
studied byStudied by 3 people
... ago
5.0(1)
flashcards Flashcard (38)
studied byStudied by 74 people
... ago
5.0(4)
flashcards Flashcard (24)
studied byStudied by 1 person
... ago
5.0(1)
flashcards Flashcard (187)
studied byStudied by 18 people
... ago
5.0(2)
flashcards Flashcard (238)
studied byStudied by 2491 people
... ago
5.0(10)
flashcards Flashcard (21)
studied byStudied by 7 people
... ago
5.0(1)
robot