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ECON1 > Midterm #2 > Flashcards

Midterm #2 Flashcards

1
Q

Business cycle

A

Alternating periods of economic expansion and economic recession.

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2
Q

Consumption

A

Spending by households on goods and services, not including spending on new houses.

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3
Q

Economic growth

A

The ability of an economy to produce increasing quantities of goods and services.

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4
Q

Expansion

A

The period of a business cycle during which total production and total employment are increasing.

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5
Q

Final good or service

A

A good or service purchased by a final user.

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6
Q

GDP deflator

A

A measure of the price level, calculated by dividing nominal GDP by real GDP and multiplying by 100.

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7
Q

Government purchases

A

Spending by federal, state, and local governments on goods and services.

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8
Q

Gross domestic product (GDP)

A

The market value of all final goods and services produced in a country during a period of time, typically one year.

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9
Q

Inflation rate

A

The percentage increase in the price level from one year to the next.

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10
Q

Intermediate good or service

A

A good or service that is an input into another good or service, such as a tire on a truck.

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11
Q

Investment

A

Spending by firms on new factories, office buildings, machinery, and additions to inventories, plus spending by households and firms on new houses.

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12
Q

Macroeconomics

A

The study of the economy as a whole, including topics such as inflation, unemployment, and economic growth.

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13
Q

Microeconomics

A

The study of how households and firms make choices, how they interact in markets, and how the government attempts to influence their choices.

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14
Q

Net exports

A

Exports minus imports.

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15
Q

Nominal GDP

A

The value of final goods and services evaluated at current-year prices.

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16
Q

Price level

A

A measure of the average prices of goods and services in the economy.

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17
Q

Real GDP

A

The value of final goods and services evaluated at base-year prices.

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18
Q

Recession

A

The period of a business cycle during which total production and total employment are deceasing.

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19
Q

Transfer payments

A

Payments by the government to households for which the government does not receive a new good or service in return.

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20
Q

Underground economy

A

Buying and selling of goods and services that is concealed from the government to avoid taxes or regulations or because the goods and services are illegal.

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21
Q

Value added

A

The market value a firm adds to a product.

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22
Q

Consumer price index (CPI)

A

A measure of the average of the prices a typical urban family of four pays for the goods and services they purchase.

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23
Q

Cyclical unemployment

A

Unemployment caused by a business cycle recession.

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24
Q

Deflation

A

A decline in the price level.

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25
Q

Discouraged workers

A

People who are available for work but have not looked for a job during the previous four weeks because they believe no jobs are available for them.

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26
Q

Efficiency wage

A

An above-market wage that a firm pays to increase workers’ productivity.

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27
Q

Employed

A

In government statistics, someone who currently has a job or who is temporarily away from his or her job.

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28
Q

Employment-population ratio

A

The percentage of the working-age population that is employed.

29
Q

Frictional unemployment

A

Short-term unemployment that arises from the process of matching workers with jobs.

30
Q

Inflation rate

A

The percentage increase in the price level from one year to the next.

31
Q

Labor force

A

The sum of employed and unemployed workers in the economy.

32
Q

Labor force participation rate

A

The percentage of the working-age population in the labor force.

33
Q

Menu costs

A

The costs to firms of changing prices.

34
Q

Natural rate of unemployment

A

The normal rate of unemployment, consisting of frictional unemployment and structural unemployment.

35
Q

Nominal interest rate

A

The stated interest rate on a loan.

36
Q

Price level

A

A measure of the average prices of goods and services in the economy.

37
Q

Producer price index (PPI)

A

An average of the prices received by producers of goods and services at all stages of the production process.

38
Q

Real interest rate

A

The nominal interest rate minus the inflation rate.

39
Q

Structural unemployment

A

Unemployment that arises from a persistent mismatch between the skills or attributes of workers and the requirements of jobs.

40
Q

Unemployed

A

In government statistics, someone who is not currently at work but who is available for work and who has actively looked for work during the previous month.

41
Q

Unemployment rate

A

The percentage of the labor force that is unemployed.

42
Q

Business cycle

A

Alternating periods of economic expansion and economic recession.

43
Q

Capital

A

Manufactured goods that are used to produce other goods and services.

44
Q

Crowding out

A

A decline in private expenditures as a result of an increase in government purchases.

45
Q

Financial intermediaries

A

Firms, such as banks, mutual funds, pension funds, and insurance companies, that borrow funds from savers and lend them to borrowers.

46
Q

Financial markets

A

Markets where financial securities, such as stocks and bonds, are bought and sold.

47
Q

Financial system

A

The system of financial markets and financial intermediaries through which firms acquire funds from households.

48
Q

Labor productivity

A

The quantity of goods and services that can be produced by one worker or by one hour of work.

49
Q

Long-run economic growth

A

The process by which rising productivity increases the average standard of living.

50
Q

Market for loanable funds

A

The interaction of borrowers and lenders that determines the market interest rate and the quantity of loanable funds exchanged.

51
Q

Potential GDP

A

The level of real GDP attained when all firms are producing at capacity.

52
Q

Catch-up

A

The prediction that the level of GDP per capita (or income per capita) in poor countries will grow faster than in rich countries.

53
Q

Economic growth model

A

A model that explains growth rates in real GDP per capita over the long run.

54
Q

Foreign direct investment (FDI)

A

The purchase or building by a firm of a facility in a foreign country.

55
Q

Foreign portfolio investment

A

The purchase by an individual or a firm of stocks
or bonds issued in another country.

56
Q

Globalization

A

The process of countries becoming more open to foreign trade and investment.

57
Q

Human capital

A

The accumulated knowledge and skills that workers acquire
from education and training or from their life experiences.

58
Q

Industrial Revolution

A

The application of mechanical power to the production of goods, beginning in England around 1750.

59
Q

Labor productivity

A

The quantity of goods and services that can be produced by one worker or by one hour of work.

60
Q

New growth theory

A

A model of long-run economic growth which emphasizes that technological change is influenced by economic incentives and so is determined by the working of the market system.

61
Q

Patent

A

The exclusive right to produce a product for a period of 20 years from the date the patent application is filed with the government.

62
Q

Per-worker production function

A

The relationship between real GDP per hour worked and capital per hour worked, holding the level of technology constant.

63
Q

Property rights

A

The rights individuals or firms have to the exclusive use of their property, including the right to buy or sell it.

64
Q

Rule of law

A

The ability of a government to enforce the laws of the country, particularly with respect to protecting private property and enforcing contracts.

65
Q

Technological change

A

A change in the quantity of output a firm can produce using a given quantity of inputs.

66
Q

Chapter 8: GDP: Measuring Total Production and Income

Gross Domestic Product Measures Total Production Measuring Total Production: Gross Domestic Product
Production, Income, and the Circular-Flow Diagram
Components of GDP An Equation for GDP and Some Actual Value
Measuring GDP Using the Value-Added Method Does GDP Measure What We Want It to Measure?
Shortcomings in GDP as a Measure of Total Production Shortcomings of GDP as a Measure of Well-Being
Real GDP versus Nominal GDP Calculating Real GDP
Comparing Real GDP and Nominal GDP The GDP Deflator
`Other Measures of Total Production and Total Income

A

Tee Hee

67
Q

Chapter 9 Unemployment and Inflation

Measuring the Unemployment Rate, the Labor Force Participation Rate, and the Employment-Population Ratio The Household Survey
Problems with Measuring the Unemployment Rate Trends in Labor Force Participation
Unemployment Rates for Different Groups How Long Are People Typically Unemployed?
The Establishment Survey: Another Measure of Employment Revisions in the Establishment Survey Employment Data: How Bad Was the 2007–2009 Recession?
Job Creation and Job Destruction over Time Types of Unemployment
Explaining Unemployment Measuring Inflation
Using Price Indexes to Adjust for the Effects of Inflation Nominal Interest Rates versus Real Interest Rates
`Does Inflation Impose Costs on the Economy?

A

Yee Yee

68
Q

Chapter 11 Long-Run Economic Growth: Sources and Policies

Economic Growth over Time and around the World Economic growth occurs when real GDP per capita increases.
What Determines How Fast Economies Grow? Labor productivity increases if there is an increase in the amount of capital available to each worker or if there is an improvement in technology.
Economic Growth in the United States Productivity in the United States grew rapidly from the end of World War II until the mid-1970s and has fluctuated since. Why Isn’t the Whole World Rich?
The economic growth model predicts that poor countries will grow faster than rich countries. Growth Policies
`Governments can attempt to increase economic growth through policies that enhance property rights and the rule of law, improve health and education, subsidize research and development, and provide incentives for savings and investment.

A

Gua Pua

ECON1 (1 decks)

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