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29 Cards in this Set
- Front
- Back
Economic aggregates:
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economic measures that summarize data across many different markets for goods, services, workers and assets.
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Business Cycle:
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the short-run alternation between economic downturns and upturns
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Depression:
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a very deep and prolonged downturn; fortunately, the United States hasn’t had one since the 1930’s
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Recessions:
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less prolonged economic downturns than depressions
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Expansions: (recoveries)
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economic upturns – periods in which output and employment are rising
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Employment:
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the number of people currently employed in the economy
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Unemployment:
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the number of people who are actively looking for work but aren’t currently employed
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Labor force:
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the sum of employment and unemployment – official labor force does not include discouraged workers
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Discouraged workers:
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non-working people who are capable of working but have given up looking for a job
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Underemployment:
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the number of people who work during a recession but receive lower wages then they would during an expansion due to fewer number of hours worked, lower paying jobs or both
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Unemployment:
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the percentage of the total number of people in the labor force who are unemployed
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Aggregate output:
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the economy’s total production of final goods and services for a given time period
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Stabilization policy:
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efforts undertaken to reduce the severity of recession and to rein in excessively strong expansions
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Monetary policy:
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a type of stabilization policy that involves changes in the quantity of money in circulation or in interest rates or both
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Fiscal policy:
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type of stabilization policy that involves changes in taxation or in government spending, or both
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Secular long-run growth / long-run growth:
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the sustained upward trend in aggregate output over several decades.
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Nominal measure:
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a measure that has not been adjusted for changes in prices over time
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Real measure:
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a measure that has been adjusted for changes in prices over time
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Aggregate price level:
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the overall price level for final goods and services in the economy
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Inflation:
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a rising aggregate price level
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Deflation:
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a falling aggregate price level
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Price stability:
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when the aggregate price level is changing only slowly
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Inflation rate:
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the annual percent change in the aggregate price level
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Closed economy:
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an economy that does not trade goods, services, or assets with other countries
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Open economy:
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an economy that trades goods, services, and assets with other countries
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Open-economy macroeconomics:
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the study of those aspects of macroeconomics that are affected by movements of goods, services, and assets across national boundaries
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Exchange rate:
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between two national currencies is the value of one currency in terms of the other
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Trade balance:
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the difference between the value of the goods and services it sells to other countries and the value of the goods and services it buys from other countries
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Capital flows:
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are international movements of financial assets
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