Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
26 Cards in this Set
- Front
- Back
Nominal
|
NOW (at current market prices)
|
|
Real
|
Taking into consideration inflation
|
|
Circular Flow Model
|
The interrelationship between businesses, households, and the government
|
|
Consumption
|
Individual spending
|
|
Gross Investment
|
Investing in the market, infrastructure, or saving
|
|
Government Spending
|
The spending the government does (even if it is deficit spending)
|
|
Net Exports
|
Exports minus imports
|
|
Factors of GDP
|
Consumption, Gross Private Investment, Government Spending, and Net Exports
|
|
GDP
|
Market value of all final goods and services produced in a nation within a year
|
|
Business cycle
|
The natural ups and downs of the economy
|
|
Peak
|
Temporary maximum in Real GDP. At this point the unemployment rate (u%) is probably below the natural rate of unemployment, and the inflation rate (?%) is probably increasing
|
|
Recession
|
The contractionary phase of the business cycle. A period of decline in Real GDP accompanied by an increase in u%. To be classified as a recession, the economic decline must be at least 6 months long
|
|
Trough
|
The bottom of the business cycle. The u% is probably high and ?% is probably low
|
|
Employed
|
People 16 years and older that have a job
|
|
Not in labor force
|
Kids, military personnel, retired people, stay at home Moms and Dads, full-time students, your 40 year old uncle who sleeps on the couch all day, most of the homeless
|
|
Unemployed
|
People 16 years and older that don’t have a job, but have actively searched for a job in the last 2 weeks
|
|
Labor force
|
Number of people in a country that are classified as either employed or unemployed
|
|
Frictional unemployment
|
“between jobs”, voluntary, good for individuals and society
|
|
Structural unemployment
|
Associated with lack of skills or declining industry (ex. High school dropouts, type-writer repairmen).
|
|
Cyclical unemployment
|
Associated with downturns in business cycle. Bad for society and individuals
|
|
Seasonal unemployment
|
Mall Santas, Schlitterbahn Life-guards, Ride operators at Fiesta Texas, Golf-pros in Alaska during January
|
|
Okun's Law
|
Every 1% increase in the u% causes a 2% decline in Real GDP
|
|
Inflation
|
Occurs when the economy’s overall price level is rising
|
|
Consumer price index
|
A measure of the overall cost of the goods and services bought by a typical consumer
|
|
Product market
|
Where goods and services are exchanged
|
|
Factor market
|
Where the factors of production are exchanged
|