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Flashcards in Deck 12 Deck (20):
1

Distributed Database

Database that is connected by a company's LAN

2

What is the normal sequence of a business cycle?

Expansion, peak, contraction, trough

3

Gross Domestic Product (GDP)

Total market value of all final goods and services produced within a nation in one year

4

Nominal vs. Real GDP

Nominal is not adjusted for inflation

5

Real GDP per Capita

Real GDP divided by population; used to compare standards of living

6

Characteristics of a Recession

Decrease in GDP and profits, increase in unemployment

7

Short-run vs. Long-run aggregate supply curve

Short-run: upward sloping; Long-run: vertical

8

Expansionary fiscal policy involves two things:

1. Increases in gov't spending and 2. decreases in taxes (both of these increase aggregate demand and GDP)

9

Change in Real GDP =

(Spending) / (1-MPC)

10

The three ways the Fed can increase the money supply include:

1) Lower the required reserve ratio, 2) lower the discount rate and 3) purchase gov't securities

11

Real interest rate =

Nominal interest rate - inflation rate

12

Stagflation

Occurs when there is rising unemployment, falling output, and rising price levels

13

What is the best measure to reverse a period of deflation?

Increase the money supply (decreasing interest rates help but the first choice is best)

14

Expenditure approach to measuring GDP

G: gov't purchases, I: investments, C: personal consumption, and E: net Exports

15

Gross National Product (GNP)

Market value of final goods and services produced by residents of a country

16

Unemployment Rate =

Number of unemployed / Total Labor Force

17

Frictional Unemployment

Normal unemployment resulting from workers routinely changing jobs

18

Structural unemployment

Occurs when jobs available do not correspond to the skills of the workforce

19

Consumer Price Index =

Current cost of market / base year cost of market

20

Demand-Pull Inflation vs. Cost-Push Inflation

Demand-Pull: caused by increases in AD; Cost-Push: caused by decreases in AS