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18 Cards in this Set
- Front
- Back
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What are the 2 schools of thought and what did they depend on? |
Classical Economists & Keynesian Economists They depended on how quickly wages & prices respond to disequilibrium. |
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What did Classical Economists believe? |
Wages & Prices adjusted quickly; the economy was largely self-correcting. Advocated a "Laissez-Faire" approach to macroeconomic policy. |
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What did Keynesian Economists believe? |
Wages & Prices adjusted slowly; monetary & fiscal policies were used. |
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Who stated, "In the Long Run, we'll all be dead."? |
Keynes |
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What are the time frames of Macro-economics? |
1) Short Run (prices are fixed) 2) Transition Period (prices are adjusted) 3) Long-Run (time after complete adjustment of prices) |
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In which time period is the behaviour of Keynesian model similar to the Classical Model? |
Long-Run |
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Over time, have cycles become: a) More Severe b) The Same c) Less Severe |
c) Less Severe |
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Describe the evolution of the Classical/Keynesian debate. |
1. Keynesian approach was dominant from WWII to the early 1970's 2. The Classical approach made a comeback 3. Since then, they've both been used |
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Describe a business cycle |
Business cycle: type of fluctuation found in aggregate economic activity (that organize themselves mainly in business enterprises) ie: Expansions > Recessions > Contractions > Revivals (recession, trough, expansion, peak) |
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Describe the 4 key points of the Business Cycle Definition |
1. Aggregate Economic Activity (focus on aggregate economic activity rather than a single variable) 2. Co-Movement (expansions & contractions occur at about the same time in many economic activities 3. Recurrent but NOT Periodic (phases are at same time, but not at regular predictable intervals) 4. Persistence (declines in economic activity are followed by further declines) |
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What is GDP? |
GDP: Market value of all final goods and services produced within a country, in a given period of time, at market prices Does NOT include: - intermediate/used/second-hand goods - financial assets - non-marketed goods & services |
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What type of concept is GDP? |
Production Concept |
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What type of variable is GDP? a) Stock b) Flow |
b) Flow Variable: It is measured through time |
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In the national accounts, which units produce output in the domestic economy? |
Firms & Governments |
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Household Spending accounts for how much of economic spending? a) 1/4 b) 1/3 c) 2/3 d) 1/2 |
c) 2/3 |
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What is the formula for GDP? |
Y = C + G + I + NX |
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What is GNP? |
Gross National Product: output produced by Canadians (including income earned abroad by Canadians and NOT income earned in Canada by foreigners |
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What are some popular foreign owned Companies in Canada? |
General Motors Canada (Detroit-Based) Wal-Mart Canada (Wholly owned by Wal-Mart of the US) Honda Canada (Owned by Honda Japan) Costo (Based in Seattle) Labatt Brewing Company (Belgian)f |
