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Macro Economics > Finnal > Flashcards

Finnal Flashcards

0
Q

Asset

A

Something of value

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1
Q

Money

A

Object we use in order to exchange for something we want

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2
Q

Liability

A

Debt owed

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3
Q

Barter

A

Negotiate with someone for an exchange without money

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4
Q

4 functions if money

A
  1. Money used as a medium of exchange
  2. Keeps records strait
  3. Store of value
  4. Used to differ payment (can pay something later)
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5
Q

Federal reserve system

A

Central bank of the USA, controls all banks in USA

  • sets interest rates
  • loans money to the banks
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6
Q

2 ways to measure money

A
  1. M1: deals with all cash on demand, currency’s, cash, checking accounts travelers checks coins (valued around 2 trillion)
  2. Consists of M1( 2 trillion) + savings (7 trillion) = 9 trillion
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7
Q

Monetary policy

A

The government strategy to manipulate interest rates and supply of money to slow or speed up the economy

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8
Q

Fiscal policy

A

How the gov. Manipulate taxes and spending in order to manipulate the economy

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9
Q

Prime rate

A

The best interest rate banks loan to there best customers

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10
Q

Velocity of money

A

How long does a dollar stay in a community

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11
Q

Goals of price stability

A
  1. Foster price stability
  2. Improve employment
  3. Introduce stability in financial markets like banks
  4. Motivate economic growth
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12
Q

Demand schedule

A

As interest rates go up, demand for money goes up. As interest rates go down demand for money goes down

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13
Q

Things that move demand schedule to the right

A

1 more borrowers
2 higher income
3 higher longevity
4 GDP strong

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14
Q

Exspmtionory monetary policy

A

Tries to increase GDP by

  1. Lower interest rates
  2. Increase money supply
  3. More loan-able money
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15
Q

Contractionary military supply

A

Slow down the economy make GDP smaller

  1. Increase interest rates
  2. Restrict money supply
  3. Make loans very hard to obtain/ non loan- able
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16
Q

3 strategies how gov. Taxes to expand economy

A
  1. Reduce tax, when you reduce tax DI goes up ( PI - taxes= DI)
  2. Increase gov. Spending
  3. Set the environment where buiessness want to spend more money
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17
Q

Contractionary fiscal policy to slow down economy

A
  1. Raise tax
  2. Lower gov. Spending
  3. Demotivate private companies from investing
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18
Q

Crowding out

A

As gov. Spending goes up, private investments go down and vise versa.

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19
Q

Budget deficit

A

Revenues are less than expeditiures

BD=R>Exsp.

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20
Q

Budget surplus

A

R> Exsp.

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21
Q

Philips curve

A

Shows how unemployment and inflation are connected, both short term and long term

Short: as inflation goes up, unemployment goes down and vise versa.

Long: does not effect will always be at natural unemployment ( 4-5%)

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22
Q

Open economy

A

An economy that trades with other countries

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23
Q

Closed economy

A

An economy that doesn’t trade with other countries

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24
Q

Balance of trade

A

the difference in value between a country’s imports and exports.

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25
Q

Trade surplus

A

TS = exports > imports

26
Q

Trade deficit

A

Imports > exports

USA in a trade deficit becouse of Japan and china

27
Q

Currency appreciation

A

Look at our currency compairs to others- currency value goes up

28
Q

Currency depreciation

A

Our currency goes down in value compared to other countries

29
Q

International financial system

A

Deal with other countries and other currency’s because we are in a global market. When your currency is better its is good

30
Q

Universal currency (dollar)!

A

Every one wants the dollar because it is the most valuable currency

31
Q

PPP ( purchasing power parody)

A

Make sure currency is stable, and valuable so products can be bought at a consistent price.

32
Q

Tariffs

A

Taxes on imports

33
Q

Quotas

A

Minimum or maximum imports if a product

34
Q

Embargo

A

Forbidding the purchase of another countries product

35
Q

Protectionism

A

No trade with other countries

  • argument to save jobs
  • protect our wages
  • protect new it infant economies from competition from other countries
  • national security
36
Q

Economics

A

How a society uses scarce recourses to satisfy unlimited wants and needs

37
Q

Micro economics

A

The study of individuals and markets, family’s , companies ( individual components of am economy)

38
Q

Macro economics

A

Deals with economy as a whole where we evaluate unemployment, inflation, income ect.

39
Q

Opportunity cost

A

Wen decisions are made a price is paid

40
Q

Questions asked when making decisions with scarce resources

A

1What are we going to make?
2How are we going to make it?
3For whole will we make it?

41
Q

1 Productive,
2 efficient
3 effective

A

1 effective and efficient are done together

2 do many things

3 do things correct

42
Q

Cetrerus Parabus

A

Everything stays the same but one or two variables

43
Q

Positive economics

A

Factual economics statement

44
Q

Normative economics

A

Opinion based economic statement

45
Q

Resources

A

Land
Labor
Capital ( not cash)
Entrapanurial

46
Q

Profit

A

Sales - cost

47
Q

Profit maximization

A

P and S as big as posable C as small as posable or MC = MR

48
Q

Trade offs

A

Give something up to gain something else

49
Q

Specialization

A

A country can do something better than other countries

50
Q

Comparative advantage

A

Opportunity cost is lower , can do something easier than competitor

51
Q

Absolute advantage

A

Make a product with less recourses than another manufacturer

52
Q

Circular flow of money

A

Market—> households—-> product—-> firm and vise versa

53
Q

Law of supply

A

As price goes up supply goes up as price goes down supply goes down

54
Q

Law of demand

A

As price goes up demand goes down ad price goes down demand goes up

55
Q

4 economic products

A
  1. Substitute
  2. Complement
  3. normal
  4. Inferior
56
Q

Substitute product

A

Buy product A or B

57
Q

Complement product

A

2 products that go together, one effects the other

58
Q

Normal product

A

Follows laws of supply and demand

59
Q

Inferior product

A

Cheep product bought because we cant afford normal products

60
Q

Price ceiling

A

The highest price that can be charged but must be below market equilibrium price

61
Q

Consumer surplus

A

What your willing to pay vs. what your acctualy paying

62
Q

Producer surplus

A

Difference between the lowest price your willing to do the job for and the market price

Macro Economics (5 decks)

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