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23 Cards in this Set
- Front
- Back
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3 Macroeconomics Concerns |
1. Output Growth 2. Unemployment 3. Inflation & Deflation |
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Business Cycle |
The cycle of short-term ups and downs in the economy |
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Aggregate Output |
The total quantity of goods and services produced in an economy in a given period. |
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Recession |
A period during which aggregate output declines. Conventionally, a period in which aggregate output declines for two consecutive quarters. |
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Depression |
A prolonged and deep recession. |
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Expansion or Boom |
The period in the business cycle from a trough up to a peak during which output and employment grow. |
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Contractions / Recession / Slump |
The period in the business cycle from a peak down to trough during which output and employment fall. |
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Unemployment Rate |
The percentage of the labor force that is unemployed. |
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Inflation |
An increase in the overall price level. |
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Hyperinflation |
A period of very rapid increases in the overall price level. |
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Deflation |
A decrease in the overall price level. |
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Circular Flow |
A diagram showing the income received and payments made by each sector of the economy. |
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Transfer Payments |
Cash payments made by the government to people who do not supply goods, services, or labor in exchange for these payments. They include Social Security benefits, veteran's benefits, and welfare payments. |
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The Three Market Arenas |
1. Goods and Services Market 2. Labor Market 3. Money Market / Financial Market |
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Treasury bonds / Notes / Bills |
Promissory notes issued by the federal government when it borrows money. |
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Corporate Bonds |
Promissory notes issued by firms when they borrow money. |
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Shares of Stock |
Financial instruments that give to the holder a share in the firm's ownership and therefore the right to share in the firm's profits. |
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Dividends |
The portion of a firm's profits that the firm pays out each period to it's shareholders. |
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Fiscal Policy |
Government policies concerning taxes and spending. |
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Monetary Policy |
The tools used by the Federal Reserve to control the quantity of money, which in turn affects interest rates. |
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Great Depression |
The period of severe economic contraction and high unemployment that began in 1929 and continued throughout the 1930s. |
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Fine-tuning |
The phrase used by Walter Heller to refer to the government's role in regulating inflation and unemployment. |
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Stagflation |
A situation of both high inflation and high unemployment. |
