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ECON 201 > ECON Flashcards > Flashcards

ECON Flashcards

(100 cards)

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1
Q

Policies that focus on getting umemployed workers back to work, such as job-search assitance, job-retaining programs, and work tests

A

Active labor market policies

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2
Q

Curve that shows all the combinations of inflation and real growth that are consistent with a specified date of spending growth

A

Aggregate demand curve

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3
Q

A rapid and unexpected shift in the AD curve (spending)

A

Aggregate demand shock

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4
Q

A separate income tax code, begun in 1969 to prevent the rich from not paying income taxes; not indexed to inflation and thus now an extra tax burden on many upper middle class families

A

Alternative minimum tax (AMT)

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5
Q

The practice of taking advantage of price differences for the same good in different markets by buying low in one market and selling high in another market

A

Arbitrage

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6
Q

The total tax payment divided by total income

A

Average tax rate

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7
Q

People born during the high birth-rate years of 1946-1964

A

Baby boomers

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8
Q

A sophisticated IOU that documents who owes how much and when payment must be made

A

Bond

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9
Q

The short-run movements in real GDP around its long-term trend

A

Business Fluctuations/Cycles

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10
Q

The practice of buying stocks and then holding them for the long run, regardless of what prices do in the short run

A

Buy and hold

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11
Q

Growth due to capital accumulation and adopting already existing ideas

A

Catching-Up growth

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12
Q

Something of value that helps to secure a loan; if the borrower defaults, ownership of the collateral transfers to the leader

A

Collateral

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13
Q

A reduction in the value of collateral; collateral shocks make borrowing and lending more difficult

A

Collateral shock

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14
Q

The tendency - among countries with similar steady-state levels of output - for poorer countries to grow faster than richer countries and thus for poor and rich countries to converge in income

A

Conditional Convergence

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15
Q

Private spending on finished goods and services

A

Consumption

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16
Q

When it is expected that a central bank will stick with its policy

A

Credible monetary policy

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17
Q

The decrease in private consumption and investment that occurs when government borrows more; also, the decrease in private spending that occurs when government increases spending

A

Crowding out

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18
Q

Growth due to new ideas

A

Cutting-edge growth

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19
Q

Unemployment correlated with the business cycle

A

Cyclical unemployment

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20
Q

The annual difference between federal spending and revenues

A

Deficit

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21
Q

A decrease in the average level of prices; that is, a negative inflation rate

A

Deflation

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22
Q

Jobless individuals who have given up looking for work but who would still like to find a job

A

Discouraged workers

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23
Q

A reduction in the inflation rate

A

Disinflation

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24
Q

The growth rate of GDP per capita

A

Economic growth

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25
The advantages of large-scale production that reduce average cost as quantity increases
Economies of scale
26
The claim that the prices of traded assets reflect all publicly available information
Efficient Market Hypothesis
27
The policy that an employee may quit and an employer may fire an employee at any time and for any reason; the most basic US employment law despite many exceptions to it
Employment at-will doctrine
28
The value of the asset minus the debt
Equity
29
The overnight lending rate from one major bank to another
Federal funds rate
30
Institutions such as banks, bond markets, and stock markets that reduce the costs of moving funds from savers to borrowers and investors
Financial intermediary
31
The tendency of nominal interest rates to rise one to one with expected inflation rates
Fisher effect
32
An income tax with the same tax rate on all levels of income
Flat tax
33
Someone who consumes a resources without working or contributing to the resource's upkeep
Free rider
34
Short-term unemployent caused by the ordinary difficulties of matching employee to employer
Frictional unemployment
35
GDP divided by population
GDP Per Capita
36
Spending by all levels of government on finished goods and services not including transfers
Government Purchases
37
The market value of all finished goods and services produced within a country in a year
Gross Domestic Product (GDP)
38
The market value of all finished goods and services produced by a country's residents, wherever located, in a year
Gross National Product (GNP)
39
Tools of the mind; the productive knowledge and skills that workers acquire through education, training, and experience
Human capital
40
An asset that cannot be quickly converted into cash without a large loss in value; note that a bank could be illiquid but not insolvent
Illiquid asset
41
An increase in the general or average level of prices
Inflation
42
The percentage increase in the average level of prices
Inflation rate
43
The first instance of a corporation selling stock to the public in order to raise capital
Initial Public Offering
44
A bank or institution whose liabilities are greate in value than its assets
Insolvent institution
45
The "rules of the game" that structure economic incentives
Institutions
46
The allocation of consumption, work, and leisure across time to maximize wellbeing
Intertemporal Substitution
47
The purchase of new capital goods; private spending on tools, plant, and equipment used to produce future output
Investment
48
Investments that cannot be easily moved, adjusted, or reversed if conditions change
Irriversible investments
49
The costs of shifting workers from declining sectors of the economy to growing sectors
Labor adjustment costs
50
The percentage of adults in the labor force
Labor force participation rate
51
The ratio of debt to equity; D/E
Leverage ratio
52
An asset that can be used for payments or, quickly and without loss of value, converted into an asset that can be used for payments
Liquid asset
53
A vertical line at the Solow growth rate
Long-run aggregate supply curve
54
The increase in output caused by the addition of one more unit of capital; the marginal product of capital diminshes as more and more capital is added
Marginal product of capital
55
The tax rate paid on an additional dollar of income
Marginal tax rate
56
One of the Federal Reserve's most pwerful tools is its ability to help coordinate expectations
Market confidence
57
The market where suppliers of loanable funds (savers) trade with demanders of loanable funds (borrowers), thereby determining the equilibrium interest rate
Market for loanable funds
58
The wage such that one-half of all workers earn wages below that amount and one-half of all workers earn wages above that amount
Median wage
59
The costs of changing prices
Menu costs
60
The result of government paying off its debts by printing money
Monetizing the debt
61
A widely accepted means of payment
Money
62
The false perception that occurs when people mistake changes in nominal prices for changes in real prices
Money illusion
63
Occurs when banks and other financial institutions take on too much risk, hoping that the Fed and regulators will later bail them out
Moral hazard
64
All federal debt held outside the US government
National debt held by the public
65
The rate of structural plus frictional unemployment
Natural Unemployment rate
66
The value of exports minus the value of imports
Net exports
67
GDP that has not been adjusted for inflation
Nominal GDP
68
The rate of return that does not accoutn for inflation
Nominal rate of return
69
Variables, such as nominal GDP, that have not been adjusted for changes in prices
Nominal Variables
70
Situation that occurs when workers respond to their nominal wage instead of to their real wage, that is, when workers respond to the wage number on their paychecks rather than to what their wage can buy in goods and services
Nominal wage confusion
71
When one person's consumption of the good does not limit another person's consumption
Nonrival
72
The buying and selling of government bonds by the Fed
Open market operations
73
The stock of tools including machines, structures, and equipment
Physical capital
74
An income tax with higher tax rates on people with higher incomes
Progressive tax
75
Situation that occurs when the Fed buys longer-term government bonds or other securities
Quantitative easing
76
A price that has been corrected for inflation; used to compare the prices of goods over time
Real price
77
The nominal rate of return minus the inflation rate
Real rate of return
78
Any shock that increases or decreases the potential growth rate
Real shock
79
Variables such as real GDP, that have been adjusted for changes in prices by using the same set of prices in all time periods
Real variables
80
A significant, widespread decline in real income and employment
Recession
81
A temporary purchase of securities from a financial institution or, equivalently, a short-term loan of reserves from the Fed to a financial institution with Treasuries as collateral
Repo
82
A temporary sale of securities to a financial institution or, equivalently, a short term borrowing of reserves by the Fed from a financial institution with treasuries as collateral
Reverse repo
83
Higher returns come at the price of higher risk
Risk-return trade-off
84
Income that is not spent on consumption goods
Saving
85
Curve that shows the positive relationship between the inflation rate and real growth during the period when prices and wages are sticky
Short-run aggregate supply curve
86
An economy's potential growth rate, the rate of economic growth that would occur given flexible prices and the existing real factors of production
Solow growth rate
87
In a model of economic growth, a situation in which the capital stock is neither increasing nor decreasing
Steady state
88
A certificate of ownership in a corporation
Stock
89
Persistent, long-term unemployment caused by long-lasting shocks or permanent features of an economy that make it more difficult for some workers to find jobs
Structural Unemployment
90
A cost that, once incurred, cannot be recovered
Sunk cost
91
The risk that the failure of one financial institution can bring down other institutions
Systemic risk
92
Knowledge about how the world works that is used to produce goods and services
Technological knowledge
93
The tendency for economic activities to be coordinated at common points in time
Time bunching
94
The desire to have goods and services sooner rather than later
Time preference
95
A Bureau of Labor Statistics measure that includes part-time workers who would rather have a full-time position and people who would like to work but have not given up looking for a job
Underemployment rate
96
Adults who do not have a job but who are looking for work
Unemployed workers
97
The percentage of the labor force who are unemployed
Unemployment rate
98
An association of workers that bargain collectively with employers over wages, benefits, and working conditions
Union
99
The average number of times a dollar is spent on finished goods and services in a year
Velocity of money
100
Situation in which the Federal Funds rate is close to zero
Zero lower bound

ECON 201 (7 decks)

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