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ECON 201 > ECON Flashcards > Flashcards

ECON Flashcards

1
Q

Policies that focus on getting umemployed workers back to work, such as job-search assitance, job-retaining programs, and work tests

A

Active labor market policies

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2
Q

Curve that shows all the combinations of inflation and real growth that are consistent with a specified date of spending growth

A

Aggregate demand curve

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3
Q

A rapid and unexpected shift in the AD curve (spending)

A

Aggregate demand shock

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4
Q

A separate income tax code, begun in 1969 to prevent the rich from not paying income taxes; not indexed to inflation and thus now an extra tax burden on many upper middle class families

A

Alternative minimum tax (AMT)

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5
Q

The practice of taking advantage of price differences for the same good in different markets by buying low in one market and selling high in another market

A

Arbitrage

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6
Q

The total tax payment divided by total income

A

Average tax rate

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7
Q

People born during the high birth-rate years of 1946-1964

A

Baby boomers

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8
Q

A sophisticated IOU that documents who owes how much and when payment must be made

A

Bond

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9
Q

The short-run movements in real GDP around its long-term trend

A

Business Fluctuations/Cycles

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10
Q

The practice of buying stocks and then holding them for the long run, regardless of what prices do in the short run

A

Buy and hold

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11
Q

Growth due to capital accumulation and adopting already existing ideas

A

Catching-Up growth

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12
Q

Something of value that helps to secure a loan; if the borrower defaults, ownership of the collateral transfers to the leader

A

Collateral

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13
Q

A reduction in the value of collateral; collateral shocks make borrowing and lending more difficult

A

Collateral shock

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14
Q

The tendency - among countries with similar steady-state levels of output - for poorer countries to grow faster than richer countries and thus for poor and rich countries to converge in income

A

Conditional Convergence

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15
Q

Private spending on finished goods and services

A

Consumption

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16
Q

When it is expected that a central bank will stick with its policy

A

Credible monetary policy

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17
Q

The decrease in private consumption and investment that occurs when government borrows more; also, the decrease in private spending that occurs when government increases spending

A

Crowding out

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18
Q

Growth due to new ideas

A

Cutting-edge growth

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19
Q

Unemployment correlated with the business cycle

A

Cyclical unemployment

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20
Q

The annual difference between federal spending and revenues

A

Deficit

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21
Q

A decrease in the average level of prices; that is, a negative inflation rate

A

Deflation

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22
Q

Jobless individuals who have given up looking for work but who would still like to find a job

A

Discouraged workers

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23
Q

A reduction in the inflation rate

A

Disinflation

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24
Q

The growth rate of GDP per capita

A

Economic growth

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25
Q

The advantages of large-scale production that reduce average cost as quantity increases

A

Economies of scale

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26
Q

The claim that the prices of traded assets reflect all publicly available information

A

Efficient Market Hypothesis

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27
Q

The policy that an employee may quit and an employer may fire an employee at any time and for any reason; the most basic US employment law despite many exceptions to it

A

Employment at-will doctrine

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28
Q

The value of the asset minus the debt

A

Equity

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29
Q

The overnight lending rate from one major bank to another

A

Federal funds rate

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30
Q

Institutions such as banks, bond markets, and stock markets that reduce the costs of moving funds from savers to borrowers and investors

A

Financial intermediary

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31
Q

The tendency of nominal interest rates to rise one to one with expected inflation rates

A

Fisher effect

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32
Q

An income tax with the same tax rate on all levels of income

A

Flat tax

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33
Q

Someone who consumes a resources without working or contributing to the resource’s upkeep

A

Free rider

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34
Q

Short-term unemployent caused by the ordinary difficulties of matching employee to employer

A

Frictional unemployment

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35
Q

GDP divided by population

A

GDP Per Capita

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36
Q

Spending by all levels of government on finished goods and services not including transfers

A

Government Purchases

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37
Q

The market value of all finished goods and services produced within a country in a year

A

Gross Domestic Product (GDP)

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38
Q

The market value of all finished goods and services produced by a country’s residents, wherever located, in a year

A

Gross National Product (GNP)

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39
Q

Tools of the mind; the productive knowledge and skills that workers acquire through education, training, and experience

A

Human capital

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40
Q

An asset that cannot be quickly converted into cash without a large loss in value; note that a bank could be illiquid but not insolvent

A

Illiquid asset

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41
Q

An increase in the general or average level of prices

A

Inflation

42
Q

The percentage increase in the average level of prices

A

Inflation rate

43
Q

The first instance of a corporation selling stock to the public in order to raise capital

A

Initial Public Offering

44
Q

A bank or institution whose liabilities are greate in value than its assets

A

Insolvent institution

45
Q

The “rules of the game” that structure economic incentives

A

Institutions

46
Q

The allocation of consumption, work, and leisure across time to maximize wellbeing

A

Intertemporal Substitution

47
Q

The purchase of new capital goods; private spending on tools, plant, and equipment used to produce future output

A

Investment

48
Q

Investments that cannot be easily moved, adjusted, or reversed if conditions change

A

Irriversible investments

49
Q

The costs of shifting workers from declining sectors of the economy to growing sectors

A

Labor adjustment costs

50
Q

The percentage of adults in the labor force

A

Labor force participation rate

51
Q

The ratio of debt to equity; D/E

A

Leverage ratio

52
Q

An asset that can be used for payments or, quickly and without loss of value, converted into an asset that can be used for payments

A

Liquid asset

53
Q

A vertical line at the Solow growth rate

A

Long-run aggregate supply curve

54
Q

The increase in output caused by the addition of one more unit of capital; the marginal product of capital diminshes as more and more capital is added

A

Marginal product of capital

55
Q

The tax rate paid on an additional dollar of income

A

Marginal tax rate

56
Q

One of the Federal Reserve’s most pwerful tools is its ability to help coordinate expectations

A

Market confidence

57
Q

The market where suppliers of loanable funds (savers) trade with demanders of loanable funds (borrowers), thereby determining the equilibrium interest rate

A

Market for loanable funds

58
Q

The wage such that one-half of all workers earn wages below that amount and one-half of all workers earn wages above that amount

A

Median wage

59
Q

The costs of changing prices

A

Menu costs

60
Q

The result of government paying off its debts by printing money

A

Monetizing the debt

61
Q

A widely accepted means of payment

A

Money

62
Q

The false perception that occurs when people mistake changes in nominal prices for changes in real prices

A

Money illusion

63
Q

Occurs when banks and other financial institutions take on too much risk, hoping that the Fed and regulators will later bail them out

A

Moral hazard

64
Q

All federal debt held outside the US government

A

National debt held by the public

65
Q

The rate of structural plus frictional unemployment

A

Natural Unemployment rate

66
Q

The value of exports minus the value of imports

A

Net exports

67
Q

GDP that has not been adjusted for inflation

A

Nominal GDP

68
Q

The rate of return that does not accoutn for inflation

A

Nominal rate of return

69
Q

Variables, such as nominal GDP, that have not been adjusted for changes in prices

A

Nominal Variables

70
Q

Situation that occurs when workers respond to their nominal wage instead of to their real wage, that is, when workers respond to the wage number on their paychecks rather than to what their wage can buy in goods and services

A

Nominal wage confusion

71
Q

When one person’s consumption of the good does not limit another person’s consumption

A

Nonrival

72
Q

The buying and selling of government bonds by the Fed

A

Open market operations

73
Q

The stock of tools including machines, structures, and equipment

A

Physical capital

74
Q

An income tax with higher tax rates on people with higher incomes

A

Progressive tax

75
Q

Situation that occurs when the Fed buys longer-term government bonds or other securities

A

Quantitative easing

76
Q

A price that has been corrected for inflation; used to compare the prices of goods over time

A

Real price

77
Q

The nominal rate of return minus the inflation rate

A

Real rate of return

78
Q

Any shock that increases or decreases the potential growth rate

A

Real shock

79
Q

Variables such as real GDP, that have been adjusted for changes in prices by using the same set of prices in all time periods

A

Real variables

80
Q

A significant, widespread decline in real income and employment

A

Recession

81
Q

A temporary purchase of securities from a financial institution or, equivalently, a short-term loan of reserves from the Fed to a financial institution with Treasuries as collateral

A

Repo

82
Q

A temporary sale of securities to a financial institution or, equivalently, a short term borrowing of reserves by the Fed from a financial institution with treasuries as collateral

A

Reverse repo

83
Q

Higher returns come at the price of higher risk

A

Risk-return trade-off

84
Q

Income that is not spent on consumption goods

A

Saving

85
Q

Curve that shows the positive relationship between the inflation rate and real growth during the period when prices and wages are sticky

A

Short-run aggregate supply curve

86
Q

An economy’s potential growth rate, the rate of economic growth that would occur given flexible prices and the existing real factors of production

A

Solow growth rate

87
Q

In a model of economic growth, a situation in which the capital stock is neither increasing nor decreasing

A

Steady state

88
Q

A certificate of ownership in a corporation

A

Stock

89
Q

Persistent, long-term unemployment caused by long-lasting shocks or permanent features of an economy that make it more difficult for some workers to find jobs

A

Structural Unemployment

90
Q

A cost that, once incurred, cannot be recovered

A

Sunk cost

91
Q

The risk that the failure of one financial institution can bring down other institutions

A

Systemic risk

92
Q

Knowledge about how the world works that is used to produce goods and services

A

Technological knowledge

93
Q

The tendency for economic activities to be coordinated at common points in time

A

Time bunching

94
Q

The desire to have goods and services sooner rather than later

A

Time preference

95
Q

A Bureau of Labor Statistics measure that includes part-time workers who would rather have a full-time position and people who would like to work but have not given up looking for a job

A

Underemployment rate

96
Q

Adults who do not have a job but who are looking for work

A

Unemployed workers

97
Q

The percentage of the labor force who are unemployed

A

Unemployment rate

98
Q

An association of workers that bargain collectively with employers over wages, benefits, and working conditions

A

Union

99
Q

The average number of times a dollar is spent on finished goods and services in a year

A

Velocity of money

100
Q

Situation in which the Federal Funds rate is close to zero

A

Zero lower bound

ECON 201 (7 decks)

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