Quiz 14 Flashcards
What are recurrent fluctuations in the level of economic activity called?
the Business Cycle
What are the four parts of the business cycle?
Expansion
Peak
Recession
Trough
What is the value of all finished goods and services produced within a country during a year’s time?
Gross Domestic Product (GDP)
What are the components of the economy that tend to change prior to the rest of the economy?
leading indicators
What are some examples of leading indicators?
The number of new orders
The size of the money supply
What measures the growth of inflation?
Consumer Price Index (CPI)
What is the period that is arbitrarily given value of 100 percent and other periods are then compared to it?
base period
What are the two types of inflation called?
Demand-pull inflation
Cost-push inflation
What is Demand-Pull Inflation?
Caused when the demand becomes greater that the supply, resulting in shortages.
What is Cost-Push Inflation?
Triggered when businesses face rising production costs forcing them to increase the prices of their goods.
What is the economic condition in which high inflation is combined with high unemployment called?
StagFLAtion
What is the theory that reduction of taxes makes more money available for private investment in capital and research, thereby increasing productivity?
Supply-Side Economics
