Jargon 1 Flashcards
Rise in the price of one currency relative to another
Appreciation
Anything having exchange value in the market place; wealth
Asset
A certificate acknowledging a date and amount of interest to be paid each year until repayment
An IOU
Bonds
Government document presenting government’s proposed revenues and spending for a fiscal year
Budget
Wealth invested in the production process
Consists of capital goods and capital stock
One of the four factors of production
Capital
An item used to produce other goods and services in the future rather than being consumed today
Capital goods
The total physical capital existing in an economy at any moment of time
Machinery, equipment, and plant
Capital stock
The ability of a country to produce a specific good at a lower opportunity cost then it’s trading partners
Comparative advantage
A reduction in private sector borrowing and spending caused by increased government borrowing
Gov squeezes out the private sector of investment funds
Crowding out effect
The account balance includes international purchases and sales of goods and services, cross-border interest and dividend payments, and cross-border gifts to and from both private individuals and governments
Think goods, services, money, and foreign aid crossing borders
Current account balance
And excess of liabilities over income or assets in a given period
Deficit
Manages federal finances by collecting taxes and paying bills and by managing currency, government accounts, and public debt. Also enforces finance and tax laws
Department of the treasury
The consumption of capital in the production process
The wearing out of plant and equipment
Depreciation
The currency is said to depreciate when exchange rate changes so that a unit of this currency can buy fewer units of foreign Currency
Depreciation (currency)
After tax income of households
personal income less personal taxes
Disposable income
The assembling of resources to produce new or improved products and technologies
Entrepreneurship
The combination of price level and real output that is compatible with both aggregate demand and aggregate supply
Equilibrium
Goods and services sold to foreign buyers
Export
Resource inputs used to produce goods and services
Factors of production
The central bank of the United States
it controls the money supply and supervises all the depository institutions within the country
Federal reserve system
Component of a country’s balance of payments that cover claims on or of liabilities of non-residents, specifically in regards to financial assets
Think assets crossing borders
Financial account balance
The government’s plan for spending and taxation (designed to steer aggregate demand in some desired direction)
Fiscal policy
The total market value of all final goods and services produced within a nation’s borders within a given time.
Gross domestic product
Goods and services purchased from international sources
Import
An increase in the average level of prices of goods and services
Inflation
The transportation, communications, education, judicial, and other institutional systems that facilitate market exchanges
Infrastructure
The payment for the use of funds employed in the production of capital
Interest
Expenditures on the production of new plant equipment and structures in a given time period, plus changes in business inventories
Investment
A British economist who believed the government should play an active but not all inclusive role in managing the economy
Keynes, J.M.
All persons over age 16 who are either working for pay or are actively seeking paid employment
Labor force
The quantity of a good demanded in a given time period Increases as its price falls
Law of demand
The quantity of a good supplied in a given time period Increases as its price increases
Law of supply
A period of time long enough for input prices to have fully adjusted to market forces. In this period all product and input markets are in a state of equilibrium and the economy is operating at full employment
Think decades and centuries
Macroeconomic long run
The period of time during which the prices of goods and services are changing in their respective markets, but the input prices have not yet adjusted to the changes in the product market
Think weeks and months
Macroeconomics short run
The use of money and credit controls to influence macroeconomic outcome
Monetary policy
The most desired goods or services that are foregone in order to obtain something else
Opportunity cost
The dollar value of GDP divided by total population, average GDP
Per capita gross domestic product
A good or service who is consumption by one person does not include consumption by others
Public good
Specifies the maximum amount of a good that is permitted into the country from abroad per unit of time
Quota
Hypothesis that people’s spending decisions based on all available information including the anticipated affects of government’s intervention
Rational expectations
The value of final output produced in a given period, adjusted for changing prices
Real gross domestic profit
A period of time during which the total output of the economy falls
Recession
The amount of money a firm receives in the course of doing business
Revenue
A friend of fellow classical economists Thomas Malthus and Jean Baptiste Say, he developed many economic theories that are still in use today. The most influential was comparative advantage, the theory underpinning the case for free trade
Ricardo, D
The part of disposable income not spent on current consumption
disposable income less consumption
Yd - C= S
Savings
Wrote the “wealth of Nations”, said the invisible hand determines what gets produced, how, and for whom
Smith, A
A tax on imports
Tariff
A compulsory contribution to state revenue, levied by the government on the workers income and business profits or added to the cost of some goods, services, and transactions
Tax
Exports - imports
Trade balance
The proportion of the labor force that is unemployed
Unemployment rate
