FSOT Flashcards
(145 cards)
1
Q
Bear Market
A
a market in which prices are falling, encouraging selling
2
Q
Normative economics
A
focuses on the value of economics fairness; “what should be”
3
Q
Positive economics
A
describes and explains various phenomena; “what is”
4
Q
Countervailing duty
A
an import tax imposed on certain goods in order to prevent dumping or counter export subsidies
5
Q
Planned Economy
A
the government controls the factors of production
6
Q
Recessionary Gap
A
a situation wherein the real GDP is lower than the potential GDP at the full employment level
7
Q
Inflationary Gap
A
the amount by which the actual gross domestic product exceeds potential full-employment GDP; not sustainable
8
Q
Fiscal Policy
A
government policy to attempt to manage the economy by controlling taxing and spending; done by the Treasury Dept.
9
Q
Expansionary Fiscal Policy
A
stimulates the economy during or in anticipation of a business cycle contraction; increase spending, cut taxes
10
Q
Consumer Price Index
A
a statistical estimate constructed using the prices of a sample representative items whose prices are collected periodically
11
Q
Demand Pull Inflation
A
too much money chasing too few goods
12
Q
Speculation
A
trading financial instrument involving high risk, in expectation of significant returns
13
Q
Technology (econ)
A
the sum total of knowledge and info that society has acquired concerning the use of resources to produce goods and services
14
Q
Purchasing Power
A
the amount of physical goods and services that can be bought by a given amount of money
15
Q
Bubbles
A
a market phenomenon characterized by surges in asset prices to levels significantly above the fundamental value of that asset
16
Q
GDP per capita
A
GDP of the country divided by its population; more accurate marker of wealth
17
Q
Factors of Production
A
Land
Labor
Capital
18
Q
Inflation
A
an increase in a currency supply relative to the number of people using it, resulting in rising prices of goods and services over time
19
Q
Deflation
A
a decrease in the general prices level of goods and services
20
Q
Structural Unemployment
A
unemployment caused by a lack of demand for a worker’s specific type of labor
21
Q
Interest Rate
A
the prices of borrowing money
22
Q
Expansionary Monetary Policy
A
speed up economy, increase money supply, decrease interest; leads to more borrowing and spending
23
Q
Austerity
A
raising taxes and cutting government spending to reduce debt
24
Q
Budget Deficit
A
the amount by which a government spending exeeds its income over a particular period of time
25
Debt
the accumulation of budget deficits
26
Debt Ceiling
limit on the amount of national debt that can be issues by the US Treasury
27
Contractionary Fiscal Policy
enacted by a government to reduce the money supply and ultimately spending in a country; cut spending, raise taxes; doesn't happen often
28
Deficit Spending
the government spending more money than it collects in tax revenue
29
Crowding Out
where increased public sector spending replaces or drives down private sector spending
30
Financial Account
records the purchase and sales of financial assets like stocks and bonds
31
Hyperinflation
when a country experiences a monthly inflation rate of 50% or around 13,000% annual inflation
32
Velocity of Money
the number of times the same dollar is spent per year
33
Stagflation
when output slows down or stops, or stagnates, at the same time prices rise
34
Net Exports
the annual differences between a country's exports and imports
35
Default
when a debtor is unable to meet the legel oblogation of debt repayment
36
Securitize
the process of taking an illiquid asset and transforming it into a security
37
Perverse Incentive
when a policy ends up having a negative effect, opposite of what is intended
38
Moral Hazard
when someone takes on more risk because someone else bears the burden of that risk
39
Contractionary Monetary Policy
slows down economy; decrease money supply, increase interest; decreases spending
40
Liquid Assets
an asset that can be converted into cash quickly and with minimal impact on the price received
41
Monetary Policy
government policy that attempts to manage the economy by controlling the money supply and thus interest rates; down by the Fed
42
Normal Profit
the minimum level of economic profit a company needs to stay in business
43
Variable Cost
costs that vary depending on a company's production volume
44
Externalities
external costs or benefits that acrue to an individual or society as a whole
45
Regulatory Policy
rules established by government decree
46
Market-Based Policies
policies designed to manipulate markets, prices and incentives to correct market failure; like taxes and subsidies
47
Free Riders
people who benefit without paying
48
Public Good
anything having the characteristics of a non-exclusion and non-rivalry
49
Non-Exclusion
you can't exclude people that don't pay
50
Non-Rivalry
the idea that one person's consumption of the good doesn't ruin it for others
51
Subsidy
the government payment to individuals, organizations, or businesses designed to offset cost to advance a specific public goal
52
Price Gouging
when sellers raise prices for essential items to a much higher level than is considered reasonable
53
Elasticity of Supply
large change in prices leads to a small change in quantity
54
Productive Efficiency
the idea that products are being made at the lowest possible cost
55
Allocative Efficiency
state of the economy in which production represents consumer preferences
56
Marginal Analysis
an analysis of how individuals, businesses, and governments make decisions
57
Utility
satisfaction or happiness people get from consuming a good or service
58
Law of Supply
an increase in price gives producers an incentive to produce more
59
Substitution Effect
as prices rise consumers will replace more expensive items with less costly alternatives
60
Elasticity of Demand
how sensitive quantity is to a change in prices
61
Protectionism
placing high tariffs on imports and limiting the number of foreign goods to protect local businesses
62
Exchange Rate
how much your currency is worth when you trade ir for another country's currency
63
Current Account
records the sales and purchase of goods and services, investment income earned abroad, and other transfers like donations and foreign aid
64
Marginal Revenue
the additional revenue earned from selling another unit
65
Marginal Cost
the additional cost of producing another unit
66
Sunk Cost
a cost that has already been paid and cannot be recovered
67
Fixed Cost
basic operating expenses of a business that cannot be avoided
68
Average Cost
the total cost divided by the number of output
69
Economies of Scale
companies that produce more can utilize mass production techniques and spread out their fixed costs over many units
70
Profit Maximizing Rule
produce until the marginal revenue of the most recent is equal to the marginal cost of the last produced
71
Accounting Profit
revenue minus just explicit cost (traditional out-of-poclet costs of running business)
72
Economic Profit
revenue minus explicit and implicit costs (indirect opportunity costs)
73
Third-Party-Payer Market
a market is which the person who received the good differs from the person who pays for the good
74
Production Function
Q=f(x1, x2, x3 ... xn)
Q= quantity output
x= quantities of factor inputs (ex. capital labor, land, or raw materials)
75
Required Reserve Ratio
The minimum fraction of deposits banks are required by law to keep as reserves
76
Capital Gains Tax
applies to the profit obtained by the sale of an asset, such as a stock, bought at a lower prices
77
Income Tax
progressive tax rate; tax rate increases as the taxable base grows
78
Sales Tax
indirect tax that a seller collects from a buyer and in turn pays to the government
79
Supply-Side Economics
lower tax rates and less government regulation will help boost economy
80
Monetarism
the importance of controlling the money supply to control inflation; price stability, wherein government controls the circulation of currency
81
Keynesianism
advocates government and public sector spending to boost the economy; its believed that higher spending in a recession can help the economy recover more quickly
82
Transitional Economics
focuses on moving from a centrally planned economy to a free market, wherein the market, rather than the government, sets the prices
83
Mercantilism
the economic theory that generated wealth and is stimulated by the accumulation of profitable balances which the government should encourage by means of protectionism
84
GNP
Gross National Product - the sum of all goods and services produced in a nation in a year; both domestically and internationally
85
GDP
Gross Domestic Product; the monetary value of all the finished goods and services produced within a country's borders in a specific time period
86
PPF
Production Possibilities Frontier
87
Normative Statement
econ; express a value judgement about whether a situation is subjectively desireable or understandable; looks at the world as it 'should be'
88
Just in Time Production Strategy
production adjusts to meet immediate demand; reduces costs; relies on highly dependable processes to cut overhead cost gives a competitive advantage
89
Who Controls the Money Supply?
Federal Reserve System
90
Discount Rate
the interest rate on the loans the Fed makes to banks
91
Open Market Operations
the Fed buys and sells government debt in the form of treasury bills or government bonds
92
Command Economy
completely controlled by the govenrment
93
Free Market Economy
the individual owns the fctors of production; government is hands off
94
Opportunity Cost
whatever you give up to do something
95
Scarcity
the tension between infinite wants and finite resources
96
Incentives
set of external (rather than intrinsic) motivators that explain people's choices
97
Natural Rate of Uneployment
the lowest unemployment that an economy can sustain over a long perod; in the US between 4-6%
98
Cyclical Unemployement
unemployed due to a recession
99
Discouraged Workers
unemployed people that were looking for work but have given up
100
Frictional Unemployment
the time period between jobs when a worker is searching for, or transitioning from one job to another
101
Nominal GDP
gross domestic product not adjusted for inflation
102
Real GDP
gross domestic product adjusted for inflation; more accurate
103
Recession
when two successie quarters or six months show a decrease in real GDP
104
Depression
a severe recession
105
Macroeconomics
the study of the whol economy rather than individual markets
106
Equilibrium Price
the proces at which the quantity of a product is equal to the quantity of the product in demand
107
Equilibrium Quantity
the quantity demanded or supplied at the equilibrium price
108
Market
any place where buyers and sellers meet to exchange goods and services
109
Voluntary Exchange
buyers and sellers willingly decide to make a transaction
110
Price Signals
the info that markets denerate to guide the distribution of resources
111
Invisible Hand
the unintended social benefits resulting from individual actions; greed from capitalists seeking wealth actually helps the poor in society
112
Internal Rate of Return
interest rate that makes the net present value of all cash flows for the project equal to 0
113
Ordinal Variable
clear ordering of categories like grades in school
114
Nominal (Categorical) Variables
one that has two of more categories but there is no intrinsic ordering like hair color
115
Interval (Numerical) Variable
intervals between the values are equally spaces
116
Cost Effective Employee Formula
total hours worked * hourly rate / widgets produced = dollar per widget produced
117
How much gas you need...
miles traveled / mpg = gallons needed
118
Digit
any numeral from 0 to 9
119
Total cost when you kno % of work complete and current cost
total cost = current cost / % complete
120
Calculate Reduction Percentage
(old # - new #) / old # * 100 = %
121
Relation of Average Salary Calculation
Total Expense / # of employees = average salary
higher salary - lower salary = diferences in salary
Difference / higher average = decimal
Decimal * 100 = %
122
Changes in Money Supply
change - money multiplier * initial deposit
Money multiplier - 1 / reserve ratio
123
Magic Number of Respondants for Stats Examples
1000-1500
124
Selection Bias
when people polled are not a representative sample of the population
125
Net Present Value
NPV = todays value of expected cash flows - today's invested cash
126
Extrapolation
a stats technique aimed at inferring the unknown from the known
127
Interpolation
an estimation of a value within a known data set; high degree of uncertainty
128
Meters to Yards
1 meter = 1.094 yards
1 yard = 0.914 meters
129
Inferential Statistics
numerical data that allows one to generalize; to infer from sample data the probability of something being true to a population
130
Descriptive Statistics
numerical data used to measure and describe characteristics of a group; includes measures of central tendency and variation
131
Central Tendency
a measure that represents the typical value for a data distribution; mean, median, mode
132
Standard Deviation
a computed measure of how much scores cary around the mean score
133
Pacific War
1879-1883
Chile v. Bolivia and Peru
Chile won and made Bolivia land locked
134
Battle of Midway
credited with turning the tide of the Pacific theatre during WWII
135
Philippine-American War
1899-1913
the US inherited an independence movement after purchasing from Spain; a US soldier was killed when working to quell the movement, signalling the beginning of the war; 1916 granted self-governing status; 1946 Philippines givin independence
136
Gulf War 1
1990-1991
in response to Iraqi invasion of Kuwait, the US built and international coalition to defend Saudi Arabia and after UN approval to eject Iraq from Kuwait through Operation Desert Storm
137
End of Cold War
1989-1991
as president H.W. Bush stated a desire to integrate the Soviet Union into the community of nations; the Cold War ended when communist regimes collapsed across Eastern Europe and the Soviet Union collapsed
138
Monitor v. Merrimack
civil war battle that proved wooden warships were not obsolete
139
1986 Berlin Discotheque Bombing
April 5 1986
terror attack in W Berline club frequented by US soldiers
blamed on Libya
Reagan retaliated and bombed Tripoli and Benghazi -> 15 died and 100 injured
140
30 Years War
1618-1648
principality on the territory of modern Germany
involved many continental powers
many motives -> namely Catholic v. Protestants and self-preservation of the Hapsburg Dynasty
141
7 Years War
resulted in the beginning of the modern state system in Europe
142
Soviet-Finnish War
1939-1940
following German-Soviet Nonagression Pact
Finland refused to grant Soviets a naval base and other concessions
Peace treaty ceded W. Karelia to Russia and allowed a naval base on the Hanko Peninsula
143
Vietnam War
1954-1975
North tried to take over south w/ Viet Cong
Eisenhower and Kennedy sent advisors, Johnson sent half a million troops
Nixon and Kissenger negotiated ceasefire and withdrawal
144
War of 1812
fought over elleged violations of American shipping rights
America successfully attacked Canada
Britain burned the White House
Famous Battle: battle of New Orleans
145
