Chapter 4 - Introduction To Macroeconomics

Question 0

Recession

Answer 0

A period of decline in total output, income, and employment.

Question 1

Business cycle

Answer 1

Recurring increases and decreases in the level of economic activity over periods of years.

Question 2

Real GDP

Answer 2

The value of final goods and services produced within the borders of a given country during a given time, typically a year.

Question 3

Nominal GDP

Answer 3

The dollar value of all goods and services produced within the borders of a given country using the countries current prices during the year the goods and services are produced.

Question 4

Unemployment

Answer 4

I failure of the economy to employees labor force fully.

Question 5

Inflation

Answer 5

An increase in overall price level.

Question 6

Modern economic growth

Answer 6

The historically recent phenomenon in which nations for the first time have experienced sustained increase in real GDP per capita.

Question 7

Saving

Answer 7

The accumulation of funds that results from people in an economy spend less than their incomes during a given time period.

Question 8

Financial investment

Answer 8

Purchasing financial assets for example stocks, bonds, or mutual funds or real assets for example houses, land, factories, or constructing such assets, in the expectation of financial gain.

Question 9

Economic investment

Answer 9

Spending for the production and accumulation of capital and additions to inventories.

Question 10

Investment

Answer 10

Spending for the production an accumulation of capital and additions to inventories.

Question 11

Expectations

Answer 11

The anticipations of consumers, firms, and others about future economic conditions.

Question 12

Shocks

Answer 12

Situations in which one thing is expected to occur but in reality something different occurs.

Question 13

Demand shocks

Answer 13

Sudden, unexpected changes in demand.

Question 14

Supply shocks

Answer 14

Sudden, unexpected changes in aggregate supply.

Question 15

Inventory

Answer 15

Goods that have been produced but remain unsold

Question 16

Inflexible or sticky prices

Answer 16

Product prices that remain in place even though supply or demand has changed.

Question 17

Flexible prices

Answer 17

Product prices that react within seconds to changes in supply and demand.

Question 18

Price level

Answer 18

The weighted average of the prices of all the final goods and services produced in an economy.

Question 19

Total demand

Answer 19

The demand schedule or the demand curve of all buyers of a good or service; also called market demand.

Question 20

Short run

Answer 20

1) in macroeconomics, a period in which nominal wages and other input prices do not change in response to a change in the price level. 2) in microeconomics, a period of time in which producers are able to change the quantity of some but not all of the resources they employee; a period in which some resources are fixed and some are variable.

Question 21

Long run

Answer 21

1) in microeconomics, a period of time long enough to enable producers of our products to change the quantities of all the resources the employ; period in which all resources and costs are variable and no reserves is our costs are fixed. 2) in macroeconomics,. Sufficiently long for nominal wages and other input prices to change in response to a change in the nations price level.