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26 Cards in this Set
- Front
- Back
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Financial markets
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Markets in which funds are transferred from people who have an excess of available funds to people who have a shortage.
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Security (also called a financial instrument)
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A claim on the issuer's future income or assets (any financial claim or piece of property that is subject to ownership.)
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Bond
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A debt security that promises to make payments periodically for a specified period of time.
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Interest rate
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The cost of borrowing or the price paid for the rental of funds (usually expressed as a percentage of the rental of $100 per year).
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Common stock (typically called a stock)
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Represents a share of ownership in a corporation.
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Appreciation
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Increase in the exchange rate.
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Depreciation
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Decrease in the exchange rate.
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Financial intermediaries
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Institutions that borrow from people who have saved and in turn make loans to others.
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Banks
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Financial institutions that accept deposits and make loans.
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E-finance
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Delivering financial services electronically.
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Aggregate output
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Total production of goods & services.
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Unemployment rate
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The percentage of the available labour force unemployed.
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Business cycles
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The upward and downward movement of aggregate output produced in the economy.
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Recessions
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Periods of declining aggregate output.
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Monetary theory
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The theory that relates changes in the quantity of money change in aggregate economic activity and the price level.
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Aggregate price level
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The average price of goods and services in an economy.
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Inflation
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A continual increase in the price level, affects individuals, businesses, and the government.
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Inflation rate
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The rate of change of the price level, usually measured as a percentage change per year)
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Monetary policy
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The management of money and interest rates.
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Central bank
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The organization responsible for the conduct of a nation's monetary policy.
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Fiscal policy
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Involves decisions about government spending and taxation.
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Budget deficit
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Excess of government expenditures over tax revenues for a particular time period (typically a year).
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Budget surplus
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Arises when tax revenues exceed government expenditures.
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GDP deflator
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Nominal GDP
100 x -------------------- Real GDP |
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Real GDP
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Nominal GDP
100 x ------------------- GDP deflator |
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Growth rate
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Xt - Xt - 1
------------------- x 100 Xt - 1 |
