Chapter 2 test Flashcards
an increase in the general level of prices
inflation
spending by businsses for items such as land, buildings, equipment and new products
capital projects
a financial situation that occurs when a government spends less than it takes in
budget surplus
the production output in relation to a unit of input, such as a worker
productivity
the amount individuals pay to borrow for the purchase of a home
morgage rate
the phase of the business cycle in which demand begins to decrease, businesses lower production, unemployment begins to rise, and gross domestic product growth slows for two or more quarters of the calendar year
recession
the output per person, calculated by dividing gross domestic product (GDP) by the total production
GDP per capita
the peak of the business cycle, it is a period in which most people who want to work are working, businesses produce goods and services in record numbers, wages are good, and the rate of gross domestic product growth increases
prosperity
the sales of durable and nondurable goods bought by consumers
retail sales
the cost of borrowing for large US corporations
corporate bond rate
ownership in a corporation
stock
the total value of all final goods and services produced in a country during one year
gross domestic product (GDP)
the movement of the economy from one condition to another and back again. it has four phases including prosperity, recession, depression and recovery
business cycle
salaries and wages as well as investment income and government payments to individuals
personal income
the total amount owed by the federal government
national debt
all people above age 16 who are actively workign or seeking work
labor force
the rate financial institutions are charged to borrow funds from the federal reserve banks
discount rate
salaries and wages as well as investment income and government payments to individuals
personal income
a number that compares prices in one year with prices in some earlier base year
price index / consumer price index
the yield on long term (20 year) US government debt obligations
treasury bond rate
the rate for six month time deposits at savings institutions
certificate of deposit rate
represents debt for an organization
bond
the total amount owed by the federal government
national debt
the yield on short term (13 week) US government debt obligations
t-bill rate
the portion of people in the labor force who are not working
unemployment rate
a financial situation that occurs when a government spends more than it takes in
budget deficit
an increase in the general price level
inflation
the phase in the business cycle in which unemployment begins to decrease, demand for goods and services increases, and gross domestic product begins to rise again
recovery
the phase of the business cycle that is marked by a prolonged period of high unemployment, weak consumer sals, and business failures
depression
the movement of an economy from one condition to another and back again
business cycle
a decrease in the general price level
deflation
places where consumer incomes and buying power are increasing because of economic expansion
emerging markets
a phase marked by a long period of high enemployment, weak consumer sales and business failures
depression
production output in relation to a unit of input, such as a worker
productivity
what are the 4 phases of a business cycle?
- prosperity
- recession
- depression
- recovery
a period in which demand, production, and GDP growth decrease and unemployment begins to rise
recession
spending by businesses for items such as land, buildings and equipment
capital project
government spends less than it takes in
budget surplus
the phase in which unemployment decreases, demand for goods and services increases, and GDP begins to rise
recovery
the sales of durable and nondurable goods bought by consumers
retail sales
the portion of people in the labor force who are not working
unemployment rate
the rate banks make available to their best business customers, such as large corporations
prime rate
government spends more than it takes in
budget deficit
the total value of all final goods and services produced in a country in one year
GDP
the GDP divided by the total population of a country
GDP per capita
How do you calculate GDP per capita?
divide GDP by the population
a certificate representing a promise to pay a definite amount of money at a stated interest rate on a specified due date
bond
represents ownership in a corporation
stock
a period in which unemployment is low, businesses produce many goods and services, and wages are good
prosperity
a number that compares prices in one year with some earlier base year
price index
a decrease in the general level of prices
deflation
