Econ 202 Exam #2

Front 1

the group of institutions in the economy that help to match one person's saving with another person's investment.

Back 1

financial system

Front 2

financial institutions through which savers can directly provide funds to borrowers.

Back 2

financial markets

Front 3

a certificate of indebtedness

Back 3

bond

Front 4

a claim to partial ownership in a firm

Back 4

stock

Front 5

financial institutions through which savers can indirectly provide funds to borrowers.

Back 5

financial intermediaries

Front 6

and institution thats ells shares to the public and uses the proceeds to buy a portfolio of stocks and bonds.

Back 6

mutual funds

Front 7

the total income in an economy that remains after paying for consumption and government purchases,

Back 7

national saving

Front 8

the income that households have left after paying for taxes and consumption.

Back 8

private saving

Front 9

the tax revenue that the government has left after paying for its spending.

Back 9

public saving

Front 10

and excess of tax revenue over government spending.

Back 10

budget surplus

Front 11

a shortfall of tax revenue from government spending.

Back 11

budget deficit

Front 12

depositing an unspent income in a bank or using it to buy a stock or bond.

Back 12

saving

Front 13

purchase of new capital such as equipment or buildings, or selling stock.

Back 13

investment

Front 14

the market in which those who want to save supply funds and those who want to borrow to invest demand funds.

Back 14

market for loanable funds

Front 15

a decrease in investment that results from government borrowing

Back 15

crowding out

Front 16

the field that studies how people make decisions regarding the allocation of resources over time and the handling of risk.

Back 16

finance

Front 17

the amount of money today that would be needed using prevailing interest rates to produce a given future amount of money.

Back 17

present value

Front 18

the amount of money in the future that an amount of money today will yield, given prevailing interest rates.

Back 18

future value

Front 19

the accumulation in, say, a bank account where the interest earned remains in the account to earn additional interest in the future.

Back 19

compouding

Front 20

a dislike of uncertainty; people dislike bad things more than they like comparable good things.

Back 20

risk averse

Front 21

the reduction of risk achieved by replacing a single risk with a large number of smaller unrelated risks.

Back 21

diversification

Front 22

risk that affects only a single company

Back 22

firm-specific risk

Front 23

risk that affects all companies in a stock market

Back 23

market risk

Front 24

the study of a company's accounting statements and future prospects to determine its value.

Back 24

fundamental analysis

Front 25

the theory that asset prices reflect all publicly available information about the value of an asset.

Back 25

efficient markets hypothesis

Front 26

the description of asset prices that rationally reflect all available information

Back 26

informational efficiency

Front 27

the path of a variable whose changes are impossible to predict

Back 27

random walk

Front 28

the total number of workers, including both the employed and unemployed

Back 28

labor force

Front 29

the percentage of the labor force that is unemployed.

Back 29

unemployment rate

Front 30

the percentage of the adult population that is in the labor force.

Back 30

labor force participation rate

Front 31

the normal rate of unemployment around which the unemployment rate fluctuates.

Back 31

natural rate of unemployment

Front 32

the deviation of unemployment from its natural rate.

Back 32

cyclical unemployment

Front 33

individuals who would like to work but have given up looking for a job.

Back 33

discouraged workers

Front 34

unemployment that results because it takes time for workers to search for jobs that best suit their tastes and skills.

Back 34

frictional unemployment

Front 35

unemployment that results because the number of jobs available in some labor markets is insufficient to find a job for everyone who wants one.

Back 35

structural unemployment

Front 36

the process by which workers find appropriate jobs according to their tastes and skills.

Back 36

job search

Front 37

a government program that partially protects workers' incomes when they become unemployed.

Back 37

unemployment insurance

Front 38

a worker association that argues with employers over wages, benefits, and working conditions.

Back 38

unions

Front 39

the process by which workers and firms agree on terms of employment

Back 39

collective bargaining

Front 40

the organized withdrawal of labor by a union from a firm

Back 40

strike

Front 41

above equilibrium wages paid by firms to increase worker productivity.

Back 41

efficiency wages

Front 42

the set of assets in an economy that people regularly use to buy goods and services from other people

Back 42

money

Front 43

an item that buyers give to sellers when they want to purchase goods and services

Back 43

medium of exchange

Front 44

the yardstick people use to post prices and record debts

Back 44

unit of account

Front 45

an item that people can use to transfer purchasing power from the present to the future

Back 45

store of value

Front 46

the ease with which an asset can be converted into the economy's medium of exchange

Back 46

liquidity

Front 47

money that takes the form of a commodity with intrinsic value (gold,cigarettes)

Back 47

commodity money

Front 48

money without intrinsic value that can be used as money because of government decree

Back 48

fiat money

Front 49

the paper bills and coins in the hands of the public

Back 49

currency

Front 50

balances in bank accounts that depositors can access on demand by writing a check

Back 50

demand deposits

Front 51

the central bank of the united states

Back 51

the fed

Front 52

an institution designed to oversee the banking system and regulate the quantity of money in the economy

Back 52

central bank

Front 53

the quantity of money available int he economy

Back 53

money supply

Front 54

the setting of the money supply by policy makers in the central bank

Back 54

monetary policy

Front 55

a banking system in which banks hold only a fraction of deposits as reserves

Back 55

fractional - reserve banking

Front 56

the fraction of deposits that banks hold as reserves

Back 56

reserve ratio

Front 57

the amount of money the banking system generates with each dollar of reserves

Back 57

money multiplier

Front 58

the purchase and sale of us government bonds by the fed

Back 58

open-market operations

Front 59

regulations on the minimum amount of reserves that banks must hold against deposits.

Back 59

reserve requirements

Front 60

the interest rate on the loans that the fed makes to banks

Back 60

discount rate