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Economics > Endterms > Flashcards

Endterms Flashcards

1
Q

Private goods

A

excludabe and rival

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2
Q

Public goods

A

nonexcludable and nonrival

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3
Q

Free rider

A

Someone who enjoys the benefits but doesnt pay the share of the costs

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4
Q

Forced rider

A

Someone who pays the shared costs but doesnt enjoy the benefits/dislikes them

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5
Q

Club goods

A

excludable but nonrival

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6
Q

Common resources

A

non-excludable but rival

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7
Q

tragedy of the commons

A

overexploitation and undermaintenance of goods

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8
Q

Public choice

A

the study of political behaviour usint the tools of economics

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9
Q

rational ignorance

A

the benefits of being informed are less than the cost of doing so

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10
Q

GDP

A

the market value of all final goods and services within a country within a year

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11
Q

Intermediate goods

A

goods and services sold to firms them bundled/processed for sale

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12
Q

GDP per capita

A

GDP divided by the country’s population

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13
Q

National wealth

A

entire stock of assets within a nation

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14
Q

Nominal variables

A

haven’t been adjusted for changes in price

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15
Q

Nominal GDP

A

calculated using the prices at the time of sale

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16
Q

Real variables

A

adjusted for changes in price (inflation)

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17
Q

Real GDP

A

is determined using the same prices in all years

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18
Q

Recession

A

significant and widespread decline in employment and GDP

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19
Q

Business fluctuations/cycles

A

short run movements in real GDP around its long term trends

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20
Q

Consumption

A

private spending on final goods and services

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21
Q

Investments spending

A

private spending on capital goods used for future output

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22
Q

Government purchases

A

spending by all levels of government on final goods and services (transfers not included)

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23
Q

Net exports

A

value of exports and imports

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24
Q

Catching up growth

A

growth due to capital accumulation, using already existing technologies and ideas

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25
Q

Cutting edge growth

A

growth due to new ideas

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26
Q

Marginal product of capital

A

the increase in output caused by one additional unit of capital

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27
Q

Conditional convergence

A

the tendency for poorer countries to grow faster than richer ones and thus converge

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28
Q

unemployed workers

A

people with no jobs looking for work

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29
Q

unemployment rate

A

the percentage of people without a job (unemployed/employed+unemployed)*100

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30
Q

labour force participation rate

A

the percentage of adults in the labour force

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31
Q

Discouraged workers

A

people who have given up looking for work but are willing to work

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32
Q

underemployment rate

A

people who have given up looking for but are willing to work, part time workers who would work full time

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33
Q

Frictional unemployment

A

short term unemployment caused by the difficulties of matching employees to employers

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34
Q

Structural unemployment

A

persistent long term unemployment caused by long lasting shocks or permanent features of the economy

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35
Q

cyclical unemployment

A

the regular ups and downs of the business cycle

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36
Q

medium wage

A

the wage that one half of all workers earn above and below the median

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37
Q

union

A

association of workers that bargains collectively with employers

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38
Q

unemployment at will doctrine

A

states that an employee can leave or be fired for any reason whenever

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39
Q

employment protection laws

A

create insurance for full time workers and makes the market more flexible and dynamic

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40
Q

inflation

A

increase in the average level of prices

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41
Q

Inflation rate

A

increase in the average level of prices measured in percentage ((P2-P1)/P1)*100

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42
Q

Consumer Price Index

A

measures the average price for a basket of goods in a country’s population

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43
Q

GDP deflator

A

ratio of nominal GDP multiplied by 100

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44
Q

PPI (Producer price indexes )

A

the average price received by producers, uses intermediate and final goods aswell

45
Q

Real price

A

price corrected for inflation

46
Q

Velocity of money

A

the average number of times a dollar is spent on final goods and services in a year

47
Q

Deflation

A

decrease in the average level of prices

48
Q

Disinflation

A

reduction in the inflation rate

49
Q

Money illusion

A

people mistaking changes in nominal instead of real prices

50
Q

Real rate of return

A

the nominal returns minus the inflation rate

51
Q

Nominal rate of return

A

the rate of returns not accounting for inflation

52
Q

Fisher effect

A

the tendency of nominal interest rates to rise with expected inflation rates. interest rate = expected inflation rate + real interest rate

53
Q

Monetizing debt

A

is when a government pays off debt by printing money

54
Q

Business fluctuations

A

fluctuations on the growth rate of real GDP around its trend growth rate

55
Q

Recession

A

significant widespread decline in real income and employment

56
Q

Aggregate demand curve

A

shows all combinations of inflation and real growth, given a specific growth rate (m+v)

57
Q

Solow growth rate

A

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

58
Q

Long run aggregate supply curve

A

vertical at the solow growth rate

59
Q

Real shock

A

any shock that increases/decreases the potential growth rate

60
Q

Short-run aggregate supply (SRAS) curve

A

upward sloping, shows the positive relationship between inflation rate and real growth when prices are sticky.

61
Q

Aggregate demand shock

A

rapid unexpected shift in the Aggregate Demand curve (spending)

62
Q

Nominal wage confusion

A

happens when workers respond to the number on the paycheck instead of real buying power of their wage.

63
Q

intertemporal substitution

A

allocation of consumption work and leisure time to maximize well being

64
Q

irreversible investments

A

have high value only under specific conditions, cannot be easily moved, adjusted or reversed

65
Q

Labour adjustment costs

A

the costs of shifting workers from declining to growing sectors

66
Q

Time bunching

A

the tendency for economic activities to be coordinated at common time points, making buying and selling more efficient, but spreading shocks throughout time

67
Q

Collateral

A

valuable asset pledged to the lender to secure a loan. If the borrower defaults, the ownership of it is transferred

68
Q

COllateral shock

A

reduction in the value of a collateral

69
Q

Federal resever

A

the bankers bank, It can issue money to banks

70
Q

Liquid asset

A

can be used for payments quickly or converted to do so

71
Q

Fractional reserve banking

A

banks only holding a fraction of deposits in reserve, lending the rest

72
Q

Reserve ratio

A

ratio of reserve to deposit

73
Q

Money multiplier

A

the amount the money supply expands with each dollar increase in the reserve

74
Q

Quantitative easing

A

Fed buying longer term government bonds or securities

75
Q

Quantitative tightening

A

Fed selling longer ternm government bonds or securities

76
Q

Federal Funds rate

A

the overnight lending ratefrom one major bank to another

77
Q

Lender of last resort

A

loans money to banks and financial institutuions when no one else will

78
Q

Discount rate

A

the interest rate paid by the bank borrowed directly from the Fed

79
Q

Solvency crisis

A

occurs when banks become insolvent

80
Q

Insolvent bank

A

has liabilities greater than assets

81
Q

Liquidity crisis

A

occurs when banks become illiquid

82
Q

Illiquid bank

A

has short term liabilities greater than its short term assets, but overall has assets greater than liabilities

83
Q

Systematic risk

A

the risk that one financial institutons failure can bring down others

84
Q

Moreal hazard

A

financial institutions taking too much risk in hopes of the Fed and regulators bailing them out

85
Q

Disinflation

A

significant reduction in the rate of inflation

86
Q

Deflation

A

decrease in prices, a negative inflation rate

87
Q

Marginal tax rate

A

the tax paid on an additional dollar of income

88
Q

Average tax rate

A

total tax divided by total income

89
Q

Progressive tax

A

tax that rates higher on people with higher incomes

90
Q

Flat tax

A

constant tax rate

91
Q

Regressive tax

A

tax that rates higher on people with lower incomes

92
Q

National debt held by the public

A

all federal debt held by individuals, corporations etc. other than the U. S . federal government

93
Q

Deficit

A

the annual deficit between federal spending and revenues

94
Q

trade deficit

A

the value of a countrys imports exceed its exports

95
Q

trade surpus

A

the value of a countrys exports exceed its imports

96
Q

balance of payments

A

yearly summary of all transactions between residents of a country and the rest of the world

97
Q

Capital surplus

A

when the onflow of ferign capital is greater than the outflow of domestic capital

98
Q

Capital account

A

measures changes in foreign ownership of domestic assets

99
Q

FDI Foreign direct investment

A

foreigners constuct new business operations in the U S

100
Q

Portfolio investment

A

ferigner buying U.S. stocks bonds or other asset claims

101
Q

Other investment

A

usually movement of bank deposits

102
Q

Appreciation

A

increase in the price of one currecny in terms to another

103
Q

Nominal exchange rate

A

the rate of exchange of a currency for another

104
Q

Real exhange rate

A

the rate of exchange of one countrys goods and services for another’s

105
Q

Purchasing power parity theorem

A

the real power of a currency should be about the same whether spent domestically or in foreign countries. An application of the law of one price

106
Q

Law of one price

A

if trade was free, then identical goods would go for identical prices

107
Q

Floating exchange rate

A

is determined primarily by market forces

108
Q

Fixed, pegged exchange rate

A

a government or central banks promise to convert a currency at a fixed rate

109
Q

Dirty or managed float

A

a currency whose value is not pegged but a government intervenes to keep it within a range

Economics (1 decks)

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