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20 Cards in this Set
- Front
- Back
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efficiency |
the property of a resource allocation of maximizing the total surplus received by all members of society |
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equity |
the fairness of the distribution of well-being among the members of society |
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deadweight loss |
the fall in total surplus that results from a market distortion, such as a tax |
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world price |
the price of a good that prevails in the world market for that good |
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tariff |
a tax on goods produced abroad and sold domestically |
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GDP |
the market value of all final goods and services produced within a country in a given period of time |
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consumption |
spending by households on goods and services, with the exception of purchases of new housing |
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investment |
spending on capital equipment, inventories, and structures, including household purchases of new housing |
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government purchases |
spending on goods and services by local, state and federal government |
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net exports |
spending on domestically produced goods by foreigners minus spending on foreign goods by domestic residents |
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nominal GDP |
the production of goods and services valued at current prices |
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real GDP |
the production of goods and services valued at constant price |
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GDP deflator |
a measure of the price level calculated as the ratio of nominal GDP over real GDP times 100 |
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CPI |
a measure of the overall cost of the goods and services bought by a typical consumer |
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inflation rate |
the percentage change in the price index from the preceding period |
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indexation |
the automatic correction of a dollar amount for the effects of inflation by law or contract |
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nominal index rate |
the interest rate as usually reported without a correction for the effects of inflation |
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real interest rate |
the interest rate corrected for the effects of inflation |
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productivity |
the quantity of goods and services produced from each unit of labor input |
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physical capital |
the stock of equipment and structures that are used to produce goods and services |
