Econ 202, Ch.14

Front 1

Recognition Lag

Back 1

time period between an economic change and when the policymakers recognize that change.

Front 2

Administrative Lag

Back 2

Economic change is recognize it's the time before the policy is instituted

Front 3

Impact Lag

Back 3

Policy change is enacted, its the time before the policy impacts the economy

Front 4

Policymakers need ____ to see economic future

Back 4

Forcasting Tools

Front 5

3 different types of ____ complicate the achievement of ___

Back 5

time lags; proper timing

Front 6

Index of Leading Indicators

Back 6

most used type of forecasting tool. turns down prior to recession. turns up before expansion.

Front 7

Policymakers also need____ to predict the future of economy

Back 7

expectations

Front 8

Adaptive Expectation

Back 8

people rely on the past to predict economic future.

Front 9

Rational Expectation

Back 9

People rely on all available knowledge to predict future

Front 10

Expectations only differ in ___, not ___

Back 10

Short Run; Long Run

Front 11

Phillips Curve

Back 11

Illustrates relationship between rate of inflation and rate of unemployment.

Front 12

The phillips curve in 1970 thought that___caused___

Back 12

high inflation; lowered unemployment

Front 13

The phillips curve was wrong in the '70's because it didnt have___

Back 13

the new 2 expectations

Front 14

The modern phillips curve states that it is the ____between___that influences____

Back 14

difference ;actual and expected rates of inflation; the unemployment rate.

Front 15

With adaptive expectations, an unanticipated shift to emp will temporarily stimulate___&___

Back 15

output & employment;

Front 16

With rational expectations, an emp will___ to increase___

Back 16

fail; output.