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17 Cards in this Set
- Front
- Back
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Recession
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-6m decline in stock prices,business activity and employment
-2 consecutive quarters of negative growth in GDP |
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Recovery
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-Increase in GDP for at least 2 consecutive calendar quarters
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T or F
Full employment and high consumer spending lead to high inflationary periods |
T
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Keynesian Economic Theory
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(Demand-Side)
-Active govt,higher tax rates -Fiscal policy manipulation |
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Monetarist Theory
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-Control money supply by a slow and steady growth
-Monetary policy manipulation |
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Supply-sideEconomics
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-Reduce tax rates and size of govt
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M1
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All currency in circulation plus demand deposits
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M2
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M1 + MM, repos, savings account and CDs less than $100,000
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M3
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M2 + CDs greater tan $100,000
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Leading indicators
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Forecast the future of the economy
-NEW housing starts -NEW orders for durable goods -unfilled orders for durable goods -Stock prices -Unemployment CLAIMS -Money supply -Index of consumer expectations |
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Coincident indicators
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Move coincidental to the economy
-Personal income -industrial production index -GDP -non-farm payroll workers |
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Lagging indicators
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Lag behing the economy
-EXISTING hosing sales -Unemployment rate -inventory -bank interest rates |
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The Gross National Product
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Total value of all goods and services produced and shipped INSIDE and OUTSIDE the country
-Compare 1 yr to the next in constant dollars(adjusted for inflation) |
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The gross domestic product
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Total value of all goods and services produced WITHIN the US. Includes only income derived within the country
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Producer price index
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Monthly measure of change in producer(wholesaler) prices
-Changes in PPI may indicate upcoming changed in CPI |
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CPI
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AKA cost of living index
Monthly measure of the change in th eprice of the average goods and services bought by wage eraners |
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Disentermediation
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Occurs when investors on a large scale withdraw savings and invest in MM and bonds to obtain higher yields
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