Chapter 4 Flashcards
Terms studied in chapter four of the Economics book.
Invisible hand
The term used by Adam Smith to describe the market mechanism
Great Depression
A period of severe economic slump lasting 10 years, from 1929 to 1939
Classical Economic Models
Pre-Keynesian economic models that emphasized the market forces of demand and supply
Fiscal Policy
The use of government spending and taxes to regulate economic activity
Keynesian Economics
Economics based on the premise that the total output is determined by total spending; it emphasizes the demand side of the economy
Stagflation
The simultaneous occurrence of high rates of inflation and high rates of unemployment
Supply Side
The production or cost side of the economy
New Classical Economists
Economists who emphasize wage and price flexibility and believe in rapid macroeconomic adjustment
New Keynesian Economists
Economists who emphasize wage and price inflexibility and believe that markets can fail to adjust
Macroeconomic Policy
Deliberate government action taken to achieve economic objectives
Monetary Policy
Action taken by the central bank to change money supply and interest rates to achieve economic objectives
Income Policies
Actions taken by the government to control wages and prices to achieve economic objectives
Transfer Payments
Payments that do not represent compensation for goods or services
Unemployment Rate
The number of working age Canadians actively seeking employment (yet currently unemployed) expressed as a percentage of the labour force
Consumer Price Index (CPI)
An index that measures the level of the prices of consumer goods and services
