AP GOVPOL VOCAB UP TO 336 + UP to Unit 2 Vocab Macroeconomics

Private sector

Part of the economy run by individuals and businesses

Public sector

Part of the economy that is controlled by the government

Factor payments

Payment for the factors of production like rent, wages, interest, and profit

Transfer payments

When the government redistributes income like welfare or social welfare

Subsidies

Government payments to businesses to increase supply

Gross domestic product (GDP)

Dollar value of all final new goods and services produced within a country in one year

GDP per capita

GDP divided by population/per person

Intermediate goods

Goods inside final goods that don't count towards GDP

Durable goods

Goods that don't wear out quickly and last over a long period of time

Nondurable goods

Goods that have a short life cycle

Unemployment

Workers that are actively looking for a job but aren't working

Frictional unemployment

Unemployment that is temporary or being between jobs and the person has transferable skills

Seasonal unemployment

Unemployment based on time of year or nature of the job

Structural unemployment

Changes in the labor force that make some skills obsolete

Technological unemployment

Unemployment where automation and machinery replace workers

Cyclical unemployment

Unemployment caused by recession

Natural rate of unemployment (NRU)

Amount of unemployment that exists when the economy is healthy and growing, focuses on output and not having too much unemployment

Non-Accelerating Inflation Rate of Unemployment (NAIRU)

Focuses on inflation and not having too little unemployment

Discouraged workers

Some people are no longer looking for a job because they have given up

Underemployed workers

Someone who wants more hours and can't get them but are still considered employed

Inflation

Rising general level of prices and reduces purchasing power of money

Deflation

Decrease in general prices and causes people to hoard money

Disinflation

Prices increasing at slower rates

Nominal wage

 Wage measured by dollars rather than purchasing power

Real wage

Wage adjusted for inflation

Nominal GDP

 GDP measured in current prices and doesn't account for inflation from year to year

Real GDP

GDP expressed in constant or unchanging dollars and adjusts for inflation

Inflation =

New # - Old #/ Old # X 100

% Change in GDP =

Year 2 - Year 1/ Year 1 X 100

GDP Deflator =

Nominal GDP/ Real GDP X 100

GDP (Y) =

C + I + G + (X-M)

GDP (Y) =

Consumer spending + investment spending + Government spending + (Exports-Imports)

Nominal GDP =

(Deflator)x(Real GDP) / 100

Unemployment rate =

# of unemployed/ # of people in the labor force X 100

Consumer Price Index(CPI) =

Price of market basket/ Price of market basket in base year X 100

Scarcity

Unlimited wants but limited resources.

Macroeconomics

Study of the economy as a whole or economic aggregates.

Microeconomics

Study of small economic units such as individuals, firms, or markets.

Positive Statements

Based on facts, avoids value judgments (what is).

Normative Statements

Includes value judgments (what ought to be).

Marginal Analysis

Making decisions based on increments.

Trade-Off

All the alternatives that we give up when we make a choice.

Opportunity Cost

Most desirable alternative given up when you make a choice.

Utility

Satisfaction.

Marginal

Additional.

Allocate

Distribute.

Consumer Goods

Created for direct consumption.

Capital Goods

Goods used to make consumed goods.

Physical Capital

Human-made resource used to create other goods and services.

Human Capital

Skills or knowledge gained by a worker through education and experience.

Productivity

Measure of efficiency that shows the number of outputs per unit of input.

Constant Opportunity Cost

Resources easily adaptable for producing either goods, straight line PPC.

Law of Increasing Opportunity Cost

Producing more of one good increases the resource cost of the other good, bowed PPC.

Absolute Advantage

Producer that can produce the most output or requires the least amount of inputs.

Comparative Advantage

Producer with the lowest opportunity cost.

Terms of Trade

Agreed-upon conditions that would benefit both countries.

Demand

Different quantities of goods that consumers are willing and able to buy at different prices.

Law of Demand

Inverse relationship between price and quantity demanded.

Substitution Effect

If price goes up for a product, that product will be bought less and more of a similar product will be bought.

Income Effect

If the price goes down for a product, the purchasing power increases for consumers, allowing them to purchase more.

Law of Diminishing Marginal Utility

The more you consume anything, the additional satisfaction you receive will start to decrease.

Ceteris Paribus

All other things held constant.

Substitutes

Goods used in place of another one.

Complements

Two goods that are bought and used together.

Normal Goods

As income increases, demand increases, or as income falls, demand falls.

Inferior Goods

As income increases, demand falls, or as income falls, demand increases.

Supply

Different quantities of a good that sellers are willing and able to sell at different prices

Law of Supply

Direct relationship between price and quantity supplied, as price increases, quantity produced increases and as price falls, quantity produced falls

Subsidy

Payment a government makes to a business or market to increase supply.

Indeterminate

Ambiguous.

Price Ceiling

Maximum legal price a seller can charge for a product, shortage.

Price Floor

Minimum legal price a seller can sell a product, surplus.

Profit =

Revenue - Cost.

Per Unit Opportunity Cost =

Opportunity cost / Units gained.

Output (OOO) =

Other goes Over.

Input (IOU) =

Other goes Under

Exclusionary Rule

Evidence the government canes illegally and violating the fourth amendment can be excluded from trial

Gideon v. Wainwright

States must supply defense attorneys to indigent defendants

Griswold v. Connecticut

Privacy rights prevent state anti-birth control law

Mapp v. Ohio

States must follow the exclusionary rule

Metadata

Cell phone communication data minus the actual conversation

Miranda v. Arizona

States must inform the accused of their rights

New Jersey v. TLO

Students are entitled to a legitimate expectation of privacy but school officials do not have to have the same level of probable cause as police

Procedural due process

Address the manner in which laws are carried out and whether the law violates a basic right to life, liberty, or property

Public safety exception

Questioning to neutralize a dangerous situation and suspect voluntarily response, responses become evidence even if Miranda hasn't been read

Right to privacy

Protection of an individual's right to privacy and lifestyle

Roe v. Wade

States can't outlaw abortion in the first trimester and must adhere to the trimester standard established by the court due to a right of privacy

Search and seizure

Procedure used by the police to inspect or take property based on suspicion of a crime

Substantive due process

Address the essense of the law and whether the law violates a basic right to life, liberty, and property

Civil liberties

Personal freedoms protected from arbitrary governmental interference or deprivation

Clear and present danger test

Balancing act between competing demands of free expression and a government's need to protect a free society

Compelling governmental interest

a purpose important enough to justify the infringement of personal liberties

Due process

Ensures fair procedures where the government burdens or deprived an individual of life, liberty, and property without legal cause

Engle v. Vitale

School sponsored prayers in public schools is unconstitutional

Establishment clause

Prevented the federal government from establishing a national religion

Free exercise clause

prevents government from stopping religious practices

Libel

False statements in print that defame someone or hurt their reputation

McDonald v. Chicago

Protected the right to bear arms under the 14th amendment's due process clause and applies to federal, state, and local governments

New York Times v. United States

Defended free speech of press against prior restraint of the government

Obscene speech

Language and images offensive to the average citizen