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17 Cards in this Set

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