Econ

Front 1

Productivity

Back 1

the amount of goods and services produced for each hour of a workers time.

Front 2

GDP measures two things:

Back 2

The total income earned y everyone in the economy and the total expenditure on the economy's output of goods and services

Front 3

the four determinants of productivity

Back 3

physical capital, human capital, natural resources, and technological knowledge

Front 4

foreign portfolio investment

Back 4

an investment that is financed with foreign money, but operated by domestic residents

Front 5

foreign direct investment

Back 5

a capital investment that is owned ad operated by a foreign entity

Front 6

externalities

Back 6

the effect of one person's actions on the well-being of a bystander.

Front 7

brain drain

Back 7

the emigration of many of the most highly educated workers to rich countrir where these workers can enjoy a higher standard of living.

Front 8

property rights

Back 8

refers to the ability of people to excercise authority over the resources that they own

Front 9

inward-oriented policies

Back 9

Policies that are aimed at raising productivity and living standards within the country by avoiding interaction with the rest of the world.

Front 10

outward- oriented policies

Back 10

policies that attemot to integrate countries into the world economy.

Front 11

financial system

Back 11

the group of institutions in the economy that help to match one person's saving with another person's investment.

Front 12

financial markets

Back 12

are the institutions through which a person who wants to dave can directly supply funds to a person who wants to borrow. AKA the bond market and stock market

Front 13

financial intermediaries

Back 13

are financial insitutions through which savers can indirectly provide funds to borrowers AKA: banks and mutual funds

Front 14

financial markets

Back 14

are the institutions through which a person who wants to dave can directly supply funds to a person who wants to borrow. AKA the bond market and stock market

Front 15

Identity for GDP

Back 15

Y= C(consumption)+ I(investment)+ G(government expenditures)+ X(Net Exports)

Front 16

nominal interest rate

Back 16

the interst rate that is usually reported, the monetary return to saving and cost of borrowing

Front 17

real interest rate

Back 17

the nominal interest rate, adjusted for inflation. it equals the nominal interst rate minus the inflation rate.

Front 18

tax incentives for saving would...

Back 18

increase the supply of loanable funds

Front 19

national savings

Back 19

the source of the supply of loanable funds, is composed of private and public savings.

Front 20

if the government is running a deficit, it will result in a shift of the...

Back 20

the supply curve for loanable funds would shift to the left

Front 21

natural rate un unemployment

Back 21

refers to the amount of unemployment that an economy normally experiences

Front 22

the BSL defines the labor force as:

Back 22

the sum of all of the employed and the unemployed

Front 23

the BSL defines the unemploymemt rate as:

Back 23

the percentage of of the labor farce that is unemployed... unemployed rate= (number of unemployed/labor force)X 100

Front 24

there are two parties for every transaction:

Back 24

a buyer and a seller

Front 25

GDP

Back 25

measure of the market value of all final goods and services produced in the domestic economy in a given period of time (usually a calendar year)

Front 26

NX equals

Back 26

exports- imports

Front 27

nominal GDP

Back 27

the production of goods and services valued at that years prices

Front 28

Real GDP

Back 28

the production of goods and services valued in some base year's prices

Front 29

GDP deflator

Back 29

A price index: (nominal GDP/Real GDP) X100

Front 30

inflation rate(in percentage) equation

Back 30

= GDP deflator (later year) - GDP deflator (earlier year)
/ GDP deflator earlier year (all times 100)

Front 31

consumer price index:

Back 31

the CPI is a measure of the average price of a representative "basket of goods" purchased in a given year

Front 32

Inflation rate (in percentage terms) = (equation)

Back 32

CPI later year- CPI earlier year
/ (CPI earlier year)

Front 33

GDP does not reflect things such as:

Back 33

the value of production in the home, the value of leisure, the effects of production on environment quality

Front 34

productivity

Back 34

can be defined as the amount of goods and services produced with an hour of a workers time

Front 35

relationship between technology and human capital:

Back 35

technology refers to our level of understanding about ho things work. Human capital depends on the extent to which that understanding had been conveyed to workers.

Front 36

research and developement can be encouraged through

Back 36

public funding of research and patents(or property rights)

Front 37

policies that encourage economic growth:

Back 37

investment, investment from abroad, education, property rights and political stability, free trade, control of population growth, research and developement

Front 38

savings refers to:

Back 38

any action where a person uses part of her income for something other than consumption or paying taxes. Thus, putting money into a savings account, or buying a CD, bond, or share of stock are all saving.

Front 39

income can be used in one of three ways:

Back 39

C (consumption)+ S (savings) + T (net taxes)
(Y= C+S+T)

Front 40

Investment equation:

Back 40

I= S (private savings by households) + (T-G)(net savings of the government - NX (foreign savings flowing into the US)

Front 41

there are three sources of the supply of loanable funds:

Back 41

private savings, government savings, and foreign savings

Front 42

there are two sources of demand for loanable funds:

Back 42

people wishing to buy houses, and businesses wishing to buy capital stock