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50 Cards in this Set
- Front
- Back
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Aggregate Demand |
the total demand for goods and services in an entire economy, the demand currently produced GDP |
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absolute advantage |
the ability of one person or nation to produce a product at a lower resource cost than another |
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aggregated demanded curve |
curve that shows the relationship between the level of prices and the quantity of output supplied |
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comparative advantage |
ability of one person or nation to produce a good at a lower opportunity cost than another person |
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consumer price index |
measures the cost of a fixed basket of goods chose to represent the consumption pattern |
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consumption possibilities curve |
showing the combinations of two goods that can be consumed when a nation specializes in a particular good and trades with another |
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expected real interest rate |
the nom interest rate - expected inflation rate |
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equilibrium output |
the level of GDP at which planned expend equal the amount produced |
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fiscal policy |
changes in government taxaes and spending that affect the level of GDP |
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import quota |
gov imposed limit of the quantity of goods that can be imported |
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GDP deflator |
index that measure how to prices of goods and services included in GDP change over time |
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GDP |
the total market value of final goods and services produced |
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gross investment |
total new investment expenditures |
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Labor force |
unemploy+employ |
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law of one price |
theory that goods easily tradable should sell at same price
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MPC |
the fraction of addition income that is spent |
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MPS |
frcation of additional income saved 1-mpc |
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long run as curve |
vertical, output is determined by factors of production and technology |
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long run in macro |
period of time which prices fully adjusted |
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medium of exchange |
any items that buyers give to sellers when they purchase |
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net investment |
gross investment minus depr |
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monetary policy |
the range of actions taken by the fed to influence the level of GDP or inflation |
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nominal GDP |
value of GDP in current dollars |
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nominal interest rate |
quoted in the market |
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nominal value |
face value |
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multiplier |
the ratio of the total shift in AD to the initial shift |
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open market purchase |
feds purchased of gov bonds |
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open market sales |
feds sale of bonds |
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quant equation |
links money, velocity, prices, and real output M x V + P x y |
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real GDP |
measure of gdp that control for changes in prices |
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real interest rate |
nomin interest rate minus inflation rate |
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production poss curve |
shows the possible combos of products that an economy can produce, given that its productives resources are fully employed and effciently used |
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store of value |
the property of money that holds money preserves value until is it used in exchanged |
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velocity of money |
money turnover rate nom GDP/money supply |
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voluntary export restraint |
scheme under which an exporting country decreases it exports |
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unit of account |
standard unit in which prices can be state and the value of goods can be compared |
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CPI |
current year/base year x100 |
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multiplier |
1/(1-MPC) or 1/rr |
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equal output |
auto consump+invest/(1-mpc) |
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excess reserve |
total reser- required |
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real rate |
nom rate - inflation rate |
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real exchange rate |
xchange ratexusprice index/ foreign index |
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rate of inflation |
price 2- price 1/ price 1 |
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GDP deflator |
nom gdp in 2012/real gdp in 2011 |
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real gdp |
current gdp/imp. price deflator |
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monetary policy tools |
open market operations required rr discount rate |
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less than one
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mpc is always |
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inflation rate |
current cpi-prior/ prior |
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