Employment, Inflation And Fiscal Policy

Front 1

The tax multiplier is:
a. positive and smaller than the income multiplier
b. negative and smaller than the income multiplier
c. positive and larger than the income multiplier
d. the same as the income multiplier

Back 1

b. negative and smaller than the income multiplier

Front 2

Natural rate of UE:

Back 2

frictional and structural UE

Front 3

The amount by which aggregate expenditure falls short of the level needed to generate equilibrium national income at full employment w/o inflation:

Back 3

Recessionary Gap

Front 4

The amount by which aggregate expenditure EXCEEDS the aggregate expenditure level needed to generate equilibrium national income at full employment w/o inflation:

Back 4

Inflationary gap

Front 5

Government spending = tax revenues:

Back 5

Balanced budget
G - T = Balanced budget

Front 6

The multiple by which the equilibrium level of national income changes when a dollar change in taxes occurs.

Back 6

Tax Multiplier
-MPC/(1 - MPC)

Front 7

Tx revenues exceed government spending:

Back 7

Budget surplus

Front 8

Fiscal policy designed to moderate the severity of the business cycle:

Back 8

Countercyclical fiscal policy

Front 9

The relationship between the level of investment and the change in the level of national income:

Back 9

Accelerator

Front 10

Paper money that is not backed by or convertible into any good:

Back 10

Fiat money

Front 11

Coins and paper money:

Back 11

Currency

Front 12

Typically, M1 money:

Back 12

Money supply

Front 13

A commercial bank that receives its charter or license to function from a state government and its subject to the laws of that state:

Back 13

State-chartered bank

Front 14

A commercial bank that receives its charter from the comptroller of the currency and is subject to federal law as well as the laws of the state in which it operates:

Back 14

Nationally chartered bank

Front 15

The Fed's principal decision-making body, charged with executing the Fed's open market operations:

Back 15

Federal Open Market Committee

Front 16

The interest rate the Fed charges banks that borrow reserves from it.

Back 16

Discount rate

Front 17

Policy directives used by the Fed to moderate swings in the business cycle:

Back 17

Countercyclical monetary policy

Front 18

The minimum amount of reserves the Fed requires a bank to hold, based on a percentage of the bank's total deposit liabilities:

Back 18

Reserve requirement

Front 19

The buying and selling of government bonds by the Fed. Open Market Committee:

Back 19

Open market operations

Front 20

the market in which banks lend and borrow reserves from each other for very short periods of time, usually overnight:

Back 20

Federal funds market

Front 21

The interest rate of loans made by banks in the federal funds market:

Back 21

Federal funds rate

Front 22

The maximum percentage of the cost of a stock that can be borrowed from a bank or any other financial institution, with the stock offered as collateral:

Back 22

Margin requirement

Front 23

What are the factors of production:

Back 23

Labor
Capital and human capital
Land incl. natural resources
Entrepreneurship

Front 24

What is the Production Possibilities Curve:

Back 24

Curve that shows relationship between consumption goods and capital goods.

Front 25

The quantity of other goods that must be given up to obtain a good. (i.e. married couple gives up single life opportunity)

Back 25

Opportunity Cost

Front 26

Advantages that differ in that one country can produce a good with less resources and the other can produce a good with a lower opportunity cost than the country that they trade with.

Back 26

Absolute vs. comparative advantage

Front 27

Insatiable desire for a good or service.

Back 27

Demand

Front 28

Quantity of a good or service that a supplier is willing and able to provide at different prices

Back 28

Supply

Front 29

A change in quantity demanded of a good that is caused by factors other than a change in the price of that good. (from change in income, taste, price of other goods, expectations about future prices, population sizes)

Back 29

Change in demand

Front 30

The change of demand of a good that is brought about by a change in the price of that good:

Back 30

Change in quantity demanded

Front 31

A change in quantity that is caused by factors other than a change in the price of that good:

Back 31

Change in supply

Front 32

A curve that depicts the relationship between price and quantity demanded:

Back 32

Demand curve

Front 33

A curve that depicts the relatinship between price and quantity supplied

Back 33

Supply curve

Front 34

The inverse relationship between price and quantity demanded of a good or service, ceteris paribus

Back 34

Law of Demand

Front 35

Changes in technology, resource prices, price of other goods, and number of suppliers

Back 35

Factors of Change in supply

Front 36

What is the Equilibrium of national income?

Back 36

C+I=C+S, where saving equals intended investment.

Front 37

Total value of all final goods and services, measured in current market prices, produced in the economy during a year:

Back 37

Gross domestic product, (GDP)