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14 Cards in this Set
- Front
- Back
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1.What does the term “private closed economy’ refer to?
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P
one without international trade or gov |
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2.What is meant by “planned investment”?
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P
The amounts business frms collectively intend to invest |
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3.What is the investment schedule?
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P
show amount of investment forth coming at each level of GDP a curve or schedule that shows the amounts firms plan to invest at various possible values of real gross domestic product. |
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4.What is the equilibrium GDP?
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P
That output whose production creates total spending just sufficient to purchase that output. total of goods(GDP)= C+Ig The gross domestic product at which the total quantity of final goods and services purchased (aggregate expenditures) is equal to the total quantity of final goods and servicesproduced (the real domestic output) the real domestic output at which the aggegrate demand curve intersects the aggreagate supply curve. |
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5.What economic activities are considered to be leakages? Injections?
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P
Savings= leakage or withdrawal of spending from econs' circular flow of I&E invest=injections Leakage- (1) a withdrawal of potential spending from the income-expenditures streaming via savings, tax payment, or imports; (2) a withdrawal that reduces the lending potential of the banking system. injection-an addition od spending to the income-expenditure stream: investment, governement purchase, and net exports |
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6.What is meant by ‘actual investment”?
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P
planned + unplanned = actual - The amount that firms invest; equal to planned investment plus unplanned investment |
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7.What are the economic differences between positive net exports and negative net exports?
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P
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8.How do the incomes of our trading partners, tariffs, and exchange rates affect the GDP of the U.S.?
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P
affects their ability to buy US goods/service; tarrifs not conclusive on rise or fall of our net exports; exchange rates: depreciation good for net exports |
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9.What do economists mean by a “mixed economy”?
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P
adding Gov and taxes to model |
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10.How does the imposition of a tax affect GDP?
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P
raising taxes= leakage, gov spending=injection |
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11.What is the correlation between full-employment GDP and recessionary expenditure gaps and inflationary expenditure gaps?
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P
recessionary expenditure gap-The amount by which the aggregate expenditure scheudle must shift upward to increase the real GDP to its full employment, non inflationary level. inflationary expenditure gap- The amount by which the aggregate expenditure schedule must shift downward to decrease the nominal GDP to its full-employment noninflationary level. |
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12.Identify the key economic factors that contributed to the U.S. recession of 2001.
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P
Economic boom and low unemployment rates did not spark inflation. Strong productivitygrowth in late 1990. rise economy production capacity enabled aggregate expenditures to expand without causing inflation. excuses, interenet bubble, over capacity. |
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13.THE LAST WORD: What is Say’s Law?
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P
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14.THE LAST WORD: Who is John Maynard Keynes? What contribution did he make to the study of economics?
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P
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