Brainscape's Knowledge GenomeTM

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


See full index

Social Sciences > Chapter 29 Stuff > Flashcards

Chapter 29 Stuff Flashcards

1
Q

4 Components of Aggregate Demand

A
  1. Consumer spending
  2. government expenditures
  3. Net exports
  4. Gross Domestic investments
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Four components of aggregate Supply

A
  1. Productivity
  2. Cost of production or matierals
  3. Government regulations
  4. Capital Stock
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is happening on the LRAS curve

A

Optimal Allocation/Full Employment

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

What are the sub categories of Gross Domestic Investment

A
  1. New Contruction
  2. New Technology
  3. Business Inventory
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Define Cost-Push Inflation

A

When SRAS shifts to the left by the cost of production and price level increases.

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

Define Real Gross Domestic Product

A

300-400 consumable products

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

Define Expansionary Fiscal policy

A

Used in a recessionary state

  • Decrease personal taxes, so consumer spending can rise
  • Increase Government Spending
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Define Contractionary Fiscal Policy

A

Used in an inflationary state

  • Decrease Government Spending
  • Increase personal taxes
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Define Economics Shocks

A

Fluctuations in the economy (periods)

-Periods include, depression, recession, expansionary, peak

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

Define Net Exports (Xn)

A

Trading of products/services between countries

  • Positive Xn = Exports exceed imports
  • Negative Xn= Imports exceed Exports.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Define Demand-Pull Inflation

A

the increase demand causing the economy to move into an inflationary state

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

Define interest rates

A

the cost of borrowing money

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

Crowding out

A

investors are discouraged from investing as much due to higher interest rates

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

real wages

A

change in wages/incomes over time

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

Investment Demanded Seesaw effect

A
  1. Price level increases
  2. crowding out occurs
  3. investors invest less
  4. AD decreases
  5. Price level decreases
  6. crowding In occurs
  7. investors invest more
  8. AD increases
  9. Repeat
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What does movement along the Investment demand curve mean?

A

Left means- crowding out

Right means- crowding in

17
Q

Crowding in

A

investors are encouraged from investing as much due to lower interest rates

18
Q

Define the Real Balances Effect completely.

A 
As price level increases consumers spending will decrease 
-Asset Value Declines
 -Houses, Cars, etc.
-Purchasing Power declines
-Standard of living decreases
(and vice versa)
19
Q

Define the Interest Rate Effect

A

As price levels increase, investors will spend less seeing their investment as less profitable. (and vice versa)

20
Q

Foreign Purchases Effect

A

As the prices level increases, Xn will decrease (and vice versa)

21
Q

Two basic factors that affect net export spending

A

National Income Aboard

Exchange Rate

22
Q

The underlying factor that affects input prices

A

Domestic Resource Prices

23
Q

Two factors affect the legal-institutional environment

A

Business Taxes/subsides

Government Regulation

24
Q

International seesaw Effect

A
  1. Price Level Increases
  2. Our goods/services are more expensive
  3. Our Trading Partners buy less of goods/services
  4. Xn decreases
  5. AD decreases
  6. Price Level decreases
  7. Our goods/services are cheaper
  8. Our Trading Partners buy more of goods/services
  9. Xn increases
  10. AD increases
    Repeat
25
Q

What effect best explains the downward slope of the aggregate demand curve.

A

Interest rate effect

26
Q

A decrease in expected returns on investment will most likely shift the AD curve where?

A

Left because Ig will decrease

27
Q

If the dollar appreciates in value relative to foreign countries:

A

Foreign buyers will find US goods are becoming more expensive

28
Q

As national income in other nations decreases, aggregate demand in our economy

A

Decreases because our exports will decrease.

29
Q

Define Required Reserve Rates

A

Percentage of money held by bank for customers that demand their money

30
Q

Define Discount Rate

A

The interest rate that the FED charges banks to borrow money.

31
Q

Define Auction Faculty

A

FED Auctioning Money, Private Proposals from different banks that state how they will spend the money and puts more into the economy.

32
Q

Define Bonds

A

A bond could be thought of as an I.O.U. between the lender and borrower that includes the details of the loan and its payments.

33
Q

List the four Tools for Expansionary Monetary Policy (Used in a Recessionary State)

A
  • Lowering required reserve Ratios
  • Decreasing Discount Rates
  • Buying Bonds/Securities in Open Market Operations
  • Increasing Auction Faculty
34
Q

Define Income Multiplier Effect

A

effect on national income that increases demand after a can increase in demand

Social Sciences (4 decks)

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