Unit 4 Flashcards
When people purchase cheaper substitutes of a particular good due to rising prices.
Commodity Substitution Effect
When you purchase normal goods at a reduced price through places such as outlet centers.
Outlet Substitution Effect
When unemployment and inflation both rise at the same time.
Stagflation
Failure to represent the greater value of new goods in the CPI Index.
New Goods Effect
Losing work due to the particular time of year.
Seasonal Unemployment
Unemployment due to the fluctuation in the business cycle.
Cyclical Unemployment
When workers enter and leave the work force or change jobs due to reasons other than being laid off or fired.
Frictional Unemployment
Produced goods that are consumed rather than used as a part of another good
Final Goods
Moving or outsourcing a company’s production to another country.
Offshoring
When the government mismanages the economy by the federal government.
Structural Inflation
Produced goods that are needed to produce other goods.
Intermediate Goods
When one company or economy produces more of a particular product
Absolute Advantage
Who believed that by increasing government spending you could reverse an economic downturn?
John Maynard Keynes
A taxed placed on imported or exported goods is a tariff
true
_________’s quantity theory stated that when there is too much money in circulation, it tends to lead to inflation
David Hume
Okun’s Law states that real GDP will decline ___% for every __% increase in unemployment.
2;1
What states that a rise in inflation is the product of an increase in wage rates and the price of natural resources?
Cost-Push Theory
Arrange the stages of the business cycle beginning with a period of growth
expansion, peak, recession, trough
Which of these is the likely result of deflation?
Unemployment will increase as decreasing prices encourage consumers to delay purchases.
Which type of relationship do the two factors of the Phillips Curve have?
inverse
switching from a landline phone to a state-of-the-art smartphone
quality change effect
In the early 2000s, a car mechanic is let go because of his lack of computer knowledge
structural unemplyment
The government sends ________ to households.
goods and services
due to too much money in circulation
quantity theory
