Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

AP Macroeconomics > Basic Concepts > Flashcards

Basic Concepts Flashcards

1
Q

Economics

A

The study of how to allocate scarce resources among competing ends

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Macroeconomics

A

Branch of economics that deals with the whole economy and issues that affect most of society

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Microeconomics

A

Branch of economics that looks at decision making at the firm, household, and individual levels and studies behavior in markets for particular goods and services

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Gross Domestic Product (GDP)

A

The total value of all final goods and services produced in a year within that country

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

National Income (NI)

A

The sum of income earned by the factors of production owned by a country’s citizens

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Personal Income (PI)

A

The money income received by households before personal income taxes are subtracted

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Disposable Income (DI)

A

Personal income minus personal income taxes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Expenditure Approach

A

Adds up spending by households, firms, the government, and the rest of the world (GDP=C+I+G+(X-M))

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Income Approach

A

Makes use of the fact that expenditures on GDP ultimately become income (GDP=NI+Depreciation-Subsidies+Net Income of Foreigners)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Depreciation

A

The decline in the value of capital over time due to wear or obsolescence

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Subsidy Payments

A

Payments made by the government to farmers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Net Domestic Product

A

GDP minus depreciation (Indicates how much output is left over for consumption and additions to capital stock after replacing the capital used up in the production process)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Deflation

A

A sustained decrease in the general price level

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Nominal

A

Actual number

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Real

A

Purchasing power

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Money Illusion

A

Noting an increase in income but not the change in prices of all products

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Menu Costs

A

Cost of changing price listings

18
Q

Consumer Price Index (CPI)

A

Government’s gauge of inflation (CPI=(Cost of Base Year Basket/Cost of Current Year Basket) x 100)

19
Q

Inflation Between Years

A

((CPI in Year 1/CPI in Year 2)-1) x 100

20
Q

Real GDP

A

(Nominal GDP/CPI for the same year) x 100

21
Q

Producer Price Index (PPI)

A

Similar calculations as CPI, but applies to the prices of wholesale goods

22
Q

Gross Domestic Product Deflator

A

An alternative general price index that reflects the importance of products in current market baskets (GDP Deflator= (Cost of Current Basket at current prices/Cost of Current Basket at base year prices) x 100)

23
Q

Labor Force

A

Includes employed and unemployed adults

24
Q

Unemployed

A

A labor force participant must be willing and able to work, and must have made an effort to seek work in the past four weeks

25
Q

Labor Force Participation Rate (LFPR)

A

The number of people in the labor force divided by the working-age population

26
Q

Unemployment Rate

A

Unemployed divided by the total number in the labor force and then converted into a percent

27
Q

Frictional Unemployment

A

Occurs as unemployed workers and firms search for the best available worker-job matches (New laborers, people seeking jobs due to moving)

28
Q

Structural Unemployment

A

The result of a skills mismatch (Being replaced by a robot or other software)

29
Q

Cyclical Unemployment

A

Results from downturns in the business cycle (Losing a job during a recession or depression)

30
Q

Seasonal Unemployment

A

The result of changes in hiring patterns due to the time of the year (Ski resorts, lifeguards)

31
Q

Discouraged Workers

A

Those who are willing and able to work, but become so frustrated in their attempts to find work that they stop trying

32
Q

Natural Rate of Unemployment

A

The typical rate of unemployment in a normally functioning economy (4-5% in the United States)

33
Q

Dishonest Workers

A

Claim to be unemployed in order to receive unemployment benefits when they actually do not want a job or are working in an unreported job

34
Q

Full Employment

A

The level of employment that corresponds with the natural rate of unemployment

35
Q

Okun’s Law

A

Estimate that for every one percentage point increase in the unemployment rate above the natural rate, output falls by 2-3 percentage points

36
Q

[Short-Run] Aggregate Supply ([SR]AS)

A

Indicates the total value of output that producers are willing and able to supply at alternative price levels in a given time period

37
Q

Aggregate Demand (AD)

A

Total demand for goods and services in an economy

38
Q

Price Level

A

Average level of all prices

39
Q

Long-Run Aggregate Supply Curve (LRAS)

A

Stands at the level of output that corresponds with full employment

40
Q

Say’s Law

A

The idea that supply creates its own demand

41
Q

Theory of Rational Expectations

A

Suggests that people learn to anticipate government policies designed to influence the economy, thereby making the policies ineffectual

AP Macroeconomics (4 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions