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23 Cards in this Set

  • Front
  • Back
Elasticity
a measure of the responsivemess of quantity demanded or quantity supplied to one of its determinats
Price elasticity of demand
a measure of how much the quantity demanded of a good responds to a change in price of that good, computed as the percentage change in quantity demanded divided by the percentage change in price
Total Revenue
the amount paid by buyers and received by seller of a good, computed as the price of the good times the quantity sold
Income elasticity of demand
a measure of how much the quantity demanded of a good responds to a change in consumers income, computed as the percentage change in quantity demanded divided by the percentage chnage in income
Cross-Price elasticity of demand
a measure of how much the quantity demanded of one good responds to a change in the price of another good. Computed as the percentage chagne in quantity demanded of the first good divided by the percentage change in the price of the second good
Price elasticity of supply
a measure of how much the quanitity supplued of a good responds to a change in the price of the good, computed as the percentage change in the quantity supplied divided by the percentage change in the price.
Price ceiling
a legal maximum on the price at which a good can be sold
Price floor
a legal minimim on the price at which a good can be sold
tax incidence
the manner in which the burden of a tax is shared among participants in a market
Gross Domestic Product (GDP)
the market value of all final goods and services produced within a country in a given period of time
Consumption
spending by households on goods and services with the exception of perchases of new housing
investment
spending on capital equipment, inventories, and structures, including household purchases of new housing
government purchases
spending on local goods and services by local, state, and federal governments
net exports
spending on domestically produced goods by foreigners (exports) minus spending on foreign goods by domestic residents (imports)
nominal GDP
the production of goods and services valued at current prices
real GDP
the production of goods and services valued at constant prices (base year)
GDP deflator
a measure of he price level calculated as the ratio of nominal GPD to real GPD time 100
Consumer Price Index (CPI)
a measure of the overall cost of the goods and services bought by a typical consumer
inflation rate
the percentage change in the price index from the preceding period
Producer Price index
a measure of the cost of a basket of goods and services bought by firms
indexation
the automatic correction of a dollar amount for the effects of inflation by law or contract
Nominal interest rate
the interest rate as usually reported without a correction for the effects of inflation
Real interest rate
the interest rate corrected for the effects of inflation