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Micro1 > Macro 2 > Flashcards

Macro 2 Flashcards

0
Q

The fraction of change in an income that is spent on consumption divided by the change in income that caused it

A

Marginal propensity to consume

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1
Q

The relationship between consumption and income

A

Consumption function

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2
Q

The fraction of a change in income that is saved, the change in income that caused it

A

Marginal propensity to save

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3
Q

The relationship between saving and income

A

Saving function

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4
Q

The value of assets minus liabilities

A

Net wealth

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5
Q

Young people borrow, middle ages pay off debt, in order people draw from their savings: on average net savings over a lifetime or small

A

Lifecycle model of consumption and saving

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6
Q

The relationship between the price level and out put the firms are willing to supply

A

Aggregate supply

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7
Q

Dollars of the current year

A

Nominal wage

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8
Q

Dollars of the constant purchasing power

A

Real wage

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9
Q

The output produced when there are no surprises about the price level

A

Potential output

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10
Q

The unemployment rate when the economy produces its potential output

A

Natural rate of unemployment

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11
Q

And macro economics, a period during which the resource prices, especially those of the labor, Are fixed by explicit or implicit agreements

A

Short run

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12
Q

A curve that shows a direct relationship between the price level in the real GDP supplied in the short run

A

Short run aggregate supply curve

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13
Q

The price level and real GDP that occur when aggregate demand curve intersects the short run aggregate supply curve

A

Short run equilibrium

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14
Q

The amount by which output in the short run exceeds the economies potential output

A

Expansionary GDP

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15
Q

And macro economics, A period. During which wage contracts and resource price agreement can be renegotiated: there are no surprises about the economies actual price level

A

Long run

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16
Q

The price level in real GDP that occurs when the actual price level equals the expected price level, the real GDP supplied equals potential output, and the real GDP supplied equals the real GDP

A

Long run equilibrium

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17
Q

The amount by which the actual output in the short run fall short of the economies potential output

A

Contractionary GDP

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18
Q

A vertical line at the economies potential output: aggregate supply when there are no surprises about the price level and all resource contracts can be re-negotiated

A

Long run aggregate supply curve

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19
Q

A situation in which workers and employers failed to achieve an outcome they would all prefer

A

Coordination failure

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20
Q

Unexpected events that affect aggregate supply, sometimes only temporarily

A

Supply shocks

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21
Q

Unexpected events that increase aggregate supply, sometimes only temporarily

A

Beneficial supply shocks

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22
Q

Unexpected events that reduce aggregate supply sometimes only temporarily

A

Adverse supply shocks

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23
Q

The theory that the natural rate of unemployment depends and a part of the recent history of unemployment, high unemployment rates increase the natural rate of employment

A

Hysteresis

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24
Q

During economic expansion and recession

A

Progressive income tax

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25
Q

During economic expansion, the system automatically increases the flow of unemployment insurance taxes from income stream to the unemployment insurance fund moderating aggregate demand

A

Unemployment insurance

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26
Q

The 1960s, golden age of Keynesian and economics Pres. Kennedy proposed a federal budget deficit

Pres. Johnson: cut taxes

A

Golden age to stagflation

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27
Q

Hi unemployment high inflation resulting from a decrease in aggregate supply and demand management policies weren’t working

A

1970s stagflation

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28
Q

To traders are willing to exchange their products directly

A

Double the coincidence of wants

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29
Q

Anything that is generally excepted in exchange for goods and services

A

Money

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30
Q

Anything that facilitates traded by being generally excepted by all parties

A

Medium of exchange

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31
Q

Anything that serves both as money and as a commodity

A

Commodity money

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32
Q

A common unit for measuring the value of each good and service

A

Unit of account

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33
Q

Anything that remains it’s purchasing power over time

A

Store of value

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34
Q

People tend to trade away inferior money and hoard the best

A

Greshams law

35
Q

The difference between the face value of money and the cost of supplying it: the profit from issuing money

A

Seigniorage

36
Q

Money who’s face value exceeds the cost of production

A

Token money

37
Q

A written order interaction the bank to pay

38
Q

A bank account the permits direct payment to a third-party: for example to check or debit card

A

Transaction account

39
Q

Only a portion of the bank deposits it’s bank by reserves

A

Fractional reserve banking system

40
Q

Originally, papers promising a specific amount of gold and silver to anyone who presented them issuing banks for redemption: today Federal Reserve notes are paper money

41
Q

Banknotes that exchange for a specific commodity such as gold

A

Representative money

42
Q

Money not redeemable for any commodity: its status as money is conferred initially by government but eventually by common experience

A

Fiat money

43
Q

United States currency that constitutes a valid in legal offer of payment of debt

A

Legal tender

44
Q

Institutions that serve as go-betweens, excepting funds from savers and lending them to borrowers

A

Financial intermediaries

45
Q

Commercial banks and thrift institutions: financial institutions that except deposits from the public bank

A

Depository institutions

46
Q

Depository institutions that historically make short term loans primarily to businesses

A

Commercial bank

47
Q

Savings banks and credit unions depository institutions that historically lent money to households

A

Thrift institutions

48
Q

A collection of short-term interest earning assets purchased with funds cooled from many shareholders

A

1972 Merrill Lynch

49
Q

Purchases of sales of government securities by federal reserve an effort to influence the money supply

A

Open market operations

50
Q

12 member group that makes decisions about open market operations

A

Federal open market committee

51
Q

Deposits and financial institutions against which checks can be written in ATM or debit cards can be applied

A

Checkable deposits

52
Q

Measures the economy’s money supply

A

Money aggregates

53
Q

The narrowest measure of money supply, consisting of currency, and coins held by the nonbanking public, checkable deposits, and travelers checks

54
Q

Deposits that earn interest but have no specific maturity date

A

Savings deposits

55
Q

The money aggregate consisting of animal one plus savings deposits and money market deposit accounts: a small denomination time deposits

56
Q

Cards that talk directly to the bank account to fund purchases

A

Debit card

57
Q

A situation in which one side of the market has more reliable information then the other side

A

Asymmetric information

58
Q

Assets minus liabilities

59
Q

A financial statement that shows assists, liability, and net worth at a given point in time

A

Balance sheets

60
Q

Anything of value that is owned

61
Q

Anything that is owed to another individual or institution

62
Q

The dollar amount of reserves the bank is obligated by regulation to hold

A

Required reserves

63
Q

Obligation by regulation to hold

A

Required reserve ratio

64
Q

Bank reserves exceeding required reserves

A

Excess reserves

65
Q

A measure of the ease which an asset can be converted into money without significant loss of value

66
Q

A market for overnight lending and borrowing of reserves among banks, the market for reserves on account at the Fed

A

Federal market funds

67
Q

The interest rate charged and the federal market, the interest rate banks charge for one another for overnight borrowing: the feds target interest rate

A

Federal funds rate

68
Q

The multiple by which the money supply increases as a result of an increase in the fresh reserves in the banking system

A

Money multiplier

69
Q

Conducting banking transactions over the Internet

A

Electronic banking or E banking

70
Q

Purchases and sales of government bonds for the purpose of altering bank reserves

A

Open market operations

71
Q

A certificate of knowledge Ing a debt and the amount of interest to be paid each year until repayment: an IOU

72
Q

The rate of return on a bond: the annual interest rate payment divided by the bonds price

73
Q

Purchasing of US government bonds by the Fed to increase the money supply

A

Open market purchases

74
Q

Federal Reserve lending of reserved to profit banks

A

Discounting

75
Q

The interest rate of the Fed charges that borrow reserves

A

Discount rate

76
Q

The relationship between the mound business is plan to invest and the economy’s income

A

Investment function

77
Q

A term that means independent

A

Autonomous

78
Q

The amount of investments that firms plan to undertake during a year

A

Planned investment

79
Q

Amount of investment actually undertaken

A

Actual investment

80
Q

A relationship showing a given price level planned spending each income or real GDP

A

Aggregate expenditure line

81
Q

A relationship between aggregate income in aggregate spending that determines or a given price level where that amount of people plan to spend equals the amount produced

A

Income expenditure model

82
Q

Structural features of government spending and taxation that reduced fluctuation and disposable income and us consumption over the business cycle

A

Automatic stabilizer

83
Q

deliberate manipulation of government purchases taxation and transfer payments to promote macro economic goals such as full employment priced ability and economic growth

A

Discretionary fiscal policy

84
Q

The ratio of it change in the GDP demanded to the initial change in the Automous net taxes that brought it about

A

Simple tax multiplier

85
Q

An increase in government purchases decrease in taxes or some combination of the two aimed at increasing aggregate demand enough to return the colony to his potential output

A

Expansionary fiscal policy

Micro1 (3 decks)

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