CH 10 Flashcards
alternating periods of economic expansion and recession
Business Cycle
the amount of production in the economy, per person, adjusted for changes in the price level
Real GDP per capita
the quantity of goods and services that can be produces by one worker or by one hour of work
Labor Productivity
manufactured goods that are used to produce other goods and services
Capital
the level of real GDP attained when all firms are operating at capacity
Potential GDP
the system of financial markets and financial intermediaries through which firms acquire funds from households
The Financial System
three key services of the financial system?
- risk sharing
- liquidity
- information
factors that affect labor productivity growth? (2)
increases in capital per hour worked and technological change
Sprivate =
Y + TR - C - T
Spublic =
T - G - TR
when Spublic is zero; the govt spends as much as it brings in
balanced budget
negative Spublic value
budget deficit
positive Spublic value
budget surplus
interaction of borrowers and lenders determining the market interest rate and the quantity of loanable funds exchanged
the market for loanable funds
typical media definition of recession?
two consecutive quarters of declining real GDP
