ECON 202 FINAL Flashcards
Practicing final
What is macroeconomics?
The study of the performance of the national economy.
What is the business cycle referring to?
The fluctuations in real GDP and the two phases of expansion and recession.
Recessions
Phases of persistent decline in production.
Business Cycle Peak
turning point between expansion and recession
Expansions
phases of persistent increase in production
Business Cycle Trough
turning point between recession and expansion
Business Cycle Sequence
Expansion - Peak - Recession - Trough
Inflation
Increases in the overall level of prices
Deflation
Decreases in the overall level of prices
Nominal GDP
The market value of all the final goods and services produced within a country in a given time period.
Market Value
The price for which a good of service is sold in a market.
Final Goods and Services
A good or service that is purchased by its final user.
Intermediate Goods and Services
Items that are produced by one firm, brought by another firm, and used as a component of a final good or service.
Expenditure Approach (to measure GDP)
Measure total expenditures on final goods and services produced within a country in a given time period.
Income Approach (to measure GDP)
Measure total income received by factors of production operating within a country in a given time period.
Personal Consumption Expenditures (C)
Spending by domestic households on consumer goods and services.
Gross Private Domestic Investment (I)
Spending by domestic firms on new capital goods and additions to inventories. (also expenditure on new homes by households).
Capital Goods
Goods that are used to produce other goods and services, but are not completely used up in the production of these other goods and services.
Additions to inventories
Goods that are produced but are not sold to their final user inside of the period we are measuring GDP.
Government Expenditure on Goods and Services (G)
Purchases of goods and services by the domestic federal, sate and local governments.
Transfer Payments
Cash transfers from governments to households and firms such as social security benefits, unemployment compensation, and subsidies.
Imports (M)
Purchases of goods and services by the domestic economy from the rest of the world.
Net Exports of Goods and Services (X-M)
The value of exports minus the value of imports
Exports (X)
Sales of goods and services by the domestic economy to the rest of the world.