Term
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Definition
| value of what must be given up because of your decision |
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Term
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Definition
| social costs that affect parties outside of the economic transactions |
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Term
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Definition
| one party knows more info than the other about the product they're selling |
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Term
| gross domestic product (GDP) |
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Definition
| money value of all that the economy produces |
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Term
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Definition
| terms not adjusted for inflation |
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Term
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Definition
| amount of product an average worker turns out ina given aount of time |
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Term
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Definition
| sums of money that certain individuals revieve as outright grants from the government than as payments for services rendered |
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Term
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Definition
| economy with some public influence over the workings of free markets |
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Term
| Traditional, command, market |
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Definition
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Term
| "benefit principle" of taxation |
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Definition
| those who benefit froma tax should pay it |
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Term
| "ability to pay" principle of taxation |
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Definition
| those who can afford to pay a tax should pay it |
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Term
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Definition
| everyone pays the same % of their income with this tax |
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Term
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Definition
| % taxed increases as income increases |
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Term
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Definition
| % taxed decreases as income increases |
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Term
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Definition
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Term
| production possibilities frontier |
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Definition
| shows the possible combos of various goods that a producer can turn out given available resources |
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Term
| principle of increasing costs |
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Definition
| as the production of a good expans, the opportunity cost of prodcing another unit generally increases |
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Term
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Definition
| item used to produce other goods and services in the future |
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Term
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Definition
| society's decisions on how to divide its scarce input resources among the different outputs |
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Term
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Definition
| specializeing a task by breaking it up into smaller tasks, which raises efficiency and productivity |
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Term
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Definition
| what one country may have over another if it produces that good less infecciently as compared with the other |
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Term
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Definition
| form of economic organization in which resource allocation decisions are left to independent producers and consumers acting in their own best interests without central direction |
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Term
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Definition
| cost of market basket/cost of MB Base Yearx100 |
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Term
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Definition
| Changes the quantity demanded |
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Term
Subsitute?
Stock up?
Large % of income? |
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Definition
| Three Elasticity questions |
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Term
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Definition
| number of goods consumers demand over a specified time |
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Term
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Definition
| number of units that sellers wnat to sell over a specific time |
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Term
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Definition
| table showing how quantity supplied changes as price does |
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Term
Future expectations
Productivity of workforce
Technology progress
Change in Cost of Inputs
Change in # of Suppliers
Gvt Regulations
Taxes
Related Progress |
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Definition
| 8 Factors that Change Supply |
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Term
Black-market activity
Non-market activity
"Bads" are counted as well as "goods"
Externalities
Imports
Used Goods
Intermediaries
Stocks |
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Definition
| 8 Factors that aren't counted in GDP |
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Term
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Definition
unemployment vicitm of the economy beyond his control
(Stock Market Crash) |
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Term
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Definition
unemployment that lacks necessary skils, become obsolete
(new technology, lose limbs) |
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Term
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Definition
result of personal choice
(alcoholic, partier) |
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Term
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Definition
| volume of goods and services a given sum of money will buy |
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Term
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Definition
| % increase in purchasing power that the borrower pays to the lender for the privelage of borrowing |
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Term
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Definition
| economists that believe in laissez-faire (leave market to correct unemployment), workers will seek retraining, workers will be mobile and move to places where labor is demanded |
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Term
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Definition
| all the things that the economists put together that people buy in order to measure inflation |
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Term
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Definition
| value used to adjust nominal to real figures |
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Term
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Definition
| Factor of NI that makes most up most of total spending |
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Term
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Definition
| relationship between total consumer expenditures and total DI in the economy, holding all other determinants of consumer spending constant |
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Term
| marginal propensity to consume (MPC) |
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Definition
| ratio of changes in consumption realtions changes in DI that produce change in consumption |
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Term
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Definition
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Term
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Definition
| consumer spending=MPCxincome+autonomous consumption |
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Term
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Definition
| how much you spend when you don't earn anything |
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Term
| autonomous change in spending |
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Definition
| change in spending not due to change in income |
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Term
| induced change in spending |
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Definition
| change in spending as a direct result of a change in income |
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Term
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Definition
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Term
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Definition
| how many times an autonomous change in spending will be multiplied in order to determine the change in equilibrium income |
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Term
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Definition
| if we all collectively try to save more money, we won't be saving more money. |
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Term
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Definition
| market price of good or service-cost of production |
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Term
| self-correcting mechanism |
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Definition
| forces that drive equilibrium back to full employment |
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Term
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Definition
| feautres of economy that automatically limit recessions, but also limit expansions |
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Term
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Definition
| tax that changes with income |
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Term
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Definition
| tax that does not change with income |
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Term
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Definition
| gvt's plan to steer economy, using gvt spending plans or by changing gvt spending or taxation |
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Term
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Definition
| one-time short term fix policy |
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Term
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Definition
| policy that gives money to people |
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Term
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Definition
| policy that takes money from people |
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Term
| balanced budget multiplier |
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Definition
| when you increase gvt spending and taxes by the same amount |
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Term
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Definition
| % of every deposit that a bank must keep in reserve so as to not allow an infinite # of money and keep money away from being worthless |
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Term
| Limit to $ creation in banks |
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Definition
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Term
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Definition
| money descreed as scuh by the government with little value as a commodity |
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Term
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Definition
| the fed resrve banks plan to steer the economy by manipulating the money supply and interest rates |
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Term
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Definition
| how easily an asset can be converted into goods and services |
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Term
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Definition
| how much bond will pay-how much is paid for the bond/how much is paid for the bond |
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Term
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Definition
| the rate at which banks lend money to each other |
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Term
| interest-sensitive consumption |
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Definition
| anything that you need to loan out money for |
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Term
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Definition
| when gvt deficits encourage investors to spend |
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Term
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Definition
| when persistant gvt deficits discourage investment |
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Term
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Definition
| fed reserve bank buys gvt debt in the face of persistant deficits, presrving space for investors and creates infaltion |
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Term
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Definition
| the number of times the average dollar moves in a given amount of time |
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Term
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Definition
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Term
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Definition
| if velocity is constant then we may very easily manipulate the nominal GDP by changing the M |
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Term
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Definition
| even if V is constant, if it changes in predictable ways, the equation of exchange may be useful |
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Term
| rational expectations theory |
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Definition
| means that economists know everything they can about the economy, means even SRAS is vertical |
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Term
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Definition
| a legal limit on the quantity of product traded across borders |
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Term
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Definition
| when one currency becomes more expeensive in terms than another |
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Term
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Definition
| Same product should cost the same amount |
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Term
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Definition
| payment for a good, service, interest payment or foreign aid |
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Term
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Definition
| payment for stocks, bonds, bank accounts or land |
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Term
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Definition
| deficit that occurs at full employment |
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