Econ Ch 6-9

Front 1

public goods

Back 1

goods and services that benefit many people in a city region or country to some degree

Front 2

inefficiency of taxation

Back 2

the reduction in production and sale which typically results from imposing a tax on a good or service

Front 3

lack of flexibility and innovation

Back 3

the lack of incentive in the public sector to put technological breakthroughs into widespread use.

Front 4

rent seeking behavior

Back 4

the expenditure of money by businesses and individuals trying to influence the government

Front 5

command and control approach

Back 5

to social and economic goals directly specifies certain market outcomes and activities to achieve desirable goals

Front 6

free-rider problem

Back 6

people benefitting from a public good even if they don't pay and get a free ride from everyone else's contributions

Front 7

market regulation

Back 7

the role of the government in setting the basic rules for market competition

Front 8

antitrust law

Back 8

designed to ensure companies dont unfairly try to get market power or reduce the amount of competition in a market or industry, through collusion etc

Front 9

externality

Back 9

the impact that the actions of an individual or a business can have on others, airport noise and neighbors

Front 10

network externality

Back 10

using the network affects other peoples value in the network

Front 11

income redistribution

Back 11

shifting money from rich to poor to close big income differences

Front 12

GDP

Back 12

the dollar value of the total output of the economy in a year

Front 13

final goods and services

Back 13

goods and services that are bought by the ultimate users

Front 14

components of GDP

Back 14

nonresidential investment, residential investment, change in private inventories, government consumption and investment, net exports

Front 15

intermediate inputs

Back 15

any goods and services bought by a business that are completely used up in production in less than a year

Front 16

personal consumption

Back 16

biggest category of GDP

Front 17

gross domestic purchases

Back 17

the amount spent by consumers, businesses, and government within the U.S. on final goods and services

Front 18

GDP does not include

Back 18

nonmarket economy, stay at home mom, volunteers, child care

Front 19

underground economy

Back 19

the portion of the economy that does not pay taxes or otherwise get reported ot the government. includes illegal activity as well, drugs etc black market

Front 20

intermediate inputs

Back 20

left out of GDP, to avoid double counting

Front 21

average level of prices

Back 21

a measure of how much it costs to purchase a market basket of goods and services,

Front 22

market basket

Back 22

includes owners equivalent rent of primary residence, food at home, medical care, food away from home, rent of primary residence, recreation, gasoline, fuels and utilitiez, new vehicles, household furnishings, communication, education, lodging away from home

Front 23

CPI consumer price index

Back 23

a measure that tracks the avg price level from a base year

Front 24

inflation rate

Back 24

the annual percentage change in the average price level

Front 25

core inflation,

Back 25

thats the consumer inflation rate without taking food and energy into account

Front 26

relative price shift

Back 26

a situation where the inflation rate of a good or service is significatnly higher or lower than the overall inflation rate.

Front 27

improvement in quality

Back 27

sometimes price of a good or service rises due to quality

Front 28

pure price change

Back 28

pure change in price without change in the actual product

Front 29

money illusion

Back 29

the mistake that we make when we compare dollar amounts in different periods without adjusting for inflation

Front 30

real or inflationadjusted change

Back 30

the change in a money value, after removing the effects of inflation

Front 31

nominal change

Back 31

the increase or decrease in a money value without adjusting for inflation

Front 32

wage price spiral

Back 32

businesses and workers boost prices and wages faster and faster to stay ahead of higher expected inflation.

Front 33

hyperinflation

Back 33

a very fast increase in the average price level, brazil

Front 34

expected inflation

Back 34

the inflation rate that consumers and businesses expect will happen over the next year or longer

Front 35

unexpected inflation

Back 35

happens when the rate of price increases suddenly accelerates well above what businesses and individuals were expecting.

Front 36

economic growth

Back 36

when an economy's production of goods and services increases

Front 37

Production Possiblility Frontier PPF

Back 37

all the combination of different goods and services the economy is capable of producing at a particular time, assuming full use of all resources

Front 38

zero sum economy

Back 38

a situation where if we want to produce more of something, we necessarily have to produce less of something else.

Front 39

non zero sum

Back 39

growing economy

Front 40

Real GDP

Back 40

gross domestic proudct adjusted for inflation

Front 41

Real GDP per capita

Back 41

real GDP divided by the number of people in the country

Front 42

aggregate production function

Back 42

the link between the inputs to an economy and its outputs

Front 43

human capital

Back 43

a way to boost aggregate production is to increase the skills or education levels of the workforce

Front 44

productivity

Back 44

economic output divided by the number of worker hours

Front 45

growth rate of productivity

Back 45

percentage increase in productivity over a year