Economics Flashcards
The increase in output that results from an increase in production
returns to scale
GDP
The price of all goods and services PRODUCED by a domestic economy for a year at current mkt prices
When aggregate spending increases, the demand curve moves to the right, causing market equilibrium to occur at higher price levels.
demand pull inflation
When the supply curve moves to the left, causing the market equilibrium to occur at higher price levels.
cost push inflation
Leading indicators
are used to try to predict recoveries and recessions. they move before the movements.
A measure that starts moving after the movement
lagging indicator
Concident indicatior
moves with the movement
Natural enemployment is
All Unemployment - Cyclical unemployment
Structural unemployment
Skills dont match labor market
Cyclical unemployment
Cause by variations in the business cycle (recessions)
Discount rate
rate set by the fed at which banks can borrow money
Prime rate
rate that banks charge their most credit worthy customers on short term loans
The policy that governs taxation and government purchases is called
Fiscal policy, controlled by congress
The policy that governs the money supply is called
monetary policy, controlled by fed
Money supplies
M1: The total amount of M0 (cash/coin) outside of the private banking system plus the amount of demand deposits, travelers checks and other checkable deposits
M2: M1 + most savings accounts, money market accounts, retail money market mutual funds, and small denomination time deposits (certificates of deposit of under $100,000).
