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Economics > Unit 7 > Flashcards

Unit 7 Flashcards

1
Q

Total dollar value of all final goods and services produced in a nation in a single year.

A

GDP

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2
Q

What is the GDP formula?

A

Consumer Spending+Business Investment+Government Spending +(Exports-Imports)

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3
Q

Irregular changes in the level of total output measured by real GDP.

A

Business Cycle

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4
Q

Major slowdown of economic activities during which millions of people are unemployed, many businesses fail, and the economy operates far below capacity.

A

Depression

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5
Q

Part of the business cycle in which the nations’s output does not grow for at least six months.

A

Recession

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6
Q

Part of the business cycle during which economic activity is slowing down.

A

Contraction

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7
Q

Period of prosperity in a business cycle in which economic activity is at its highest point.

A

Peak

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8
Q

The lowest part of the business cycle in which the downward spiral of the economy levels off.

A

Trough

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9
Q

Part of the business cycle in which economic activity slowly increases.

A

Recovery Expansion

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10
Q

The difference between what a nation sells to other countries and what it buys from other countries.

A

Net Export

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11
Q

Real domestic output of producers based on the rise and fall of the price level.

A

Aggregate Supply

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12
Q

The total quantity of goods and services in the entire economy that all citizens will demand at any single time.

A

Aggregate Demand

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13
Q

The summation of all the individual parts in the economy.

A

Aggregate

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14
Q

A person who does not have a job but is actively looking for work is classified as what?

A

Unemployed

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15
Q

Use the terms “unemployment” and “workforce” to write the formula for calculating unemployment:

A

of unemployed/workforce

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16
Q

4 types of unemployment and the difference in them

A

1) cyclical- lost job due to business cycle fluctuation in output.
2) Structural- lost job due to skills.
3) Seasonal- lost job because of the change of weather.
4) Frictional- People being in the process of moving from one job to another.

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17
Q

Representative group of goods and services used to compile the consumer price index.

A

Market Basket

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18
Q

The average of prices for three years used as a point of comparison for other years in a series of statistics.

A

Base year

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19
Q

Measure of the change in price over time of a specific group of goods and services purchased by households.

A

CPI

20
Q

The producer price index measures what?

A

Change in prices producers charge for goods & services.

21
Q

Price index that removes the effect of inflation from GDP so that the overall economy in one year can be compared to another.

A

GDP price defector

22
Q

GDP that has been adjusted for inflation by applying the price deflator.

A

Real GDP

23
Q

Prolonged rise in the general price levels of goods and services.

A

Inflation

24
Q

Prolonged decline in the general price levels of goods and services.

A

Deflation

25
Q

Which indexes are used to measure inflation?

A

CPI
PPI
GDP
PI

26
Q

Situation when the amount of government spending exceeds receipts during the fiscal year.

A

deficit

27
Q
A
28
Q

Which cabinet department measures unemployment?

A

Department of Labor

29
Q

Inflation that occurs during an economic slowdown or recession is know as what?

A

stagflation

30
Q

What is the process by which the government manages spending and taxes to influence the economy and which part of government does this?

A

Fiscal policy

31
Q

A tax for a public good or service that is only on those who take advantage of that particular service (toll roads like GA 400)?

A

User Fee

32
Q

How and on which items do local governments collects sales tax?

A

Groceries & excise tax

33
Q

Which type of FICA (Federal Insurance Contributions Act) tax is place in wages and salaries at the same rate, regardless of income AND what type of tax is this considered?

A

Social Security / Proportional Tax

34
Q

Which type of tax is collected on the production of specific goods, such as cigarettes or gasoline, within a country?

A

Excise Tax

35
Q

Which segment of government proposes the federal government spending budgets?

A

Exucitve Branch

36
Q

What is the term for actions by the federal government to expand or contract the money supply and which portion of government does this?

A

Monetary Policy/ Federal Reserve

37
Q

If the federal Reserve takes measures to decreases the money supply they are said to be instituting what type of policy?

A

Tight money policy

38
Q

If the federal Reserve takes measures to decrease the money supply they are said to be instituting what type of policy?

A

Loose money Policy

39
Q

What is the term for the percentage of deposits the Federal Reserve forces banks to hold, and not loan out?

A

Reserve Requirements

40
Q

What is the term for the amount of interest that the Federal Reserve charges to large financial institutions for a loan?

A

Discount Rate

41
Q

What is the term for the buying and selling of bonds by the Federal Reserve?

A

Open Market Operations

42
Q

Would an increase in the reserve requirement be considered a Tight or Loose money policy?

A

Tight

43
Q

Would an increase in the Discount Rate be considered a Tight of Loose Money policy?

A

Tight

44
Q

If the federal reserve is purchasing bonds, would that be considered a Tight of Loose money policy?

A

Loose

45
Q

Use the Money Multiplier Formula (Initial Deposit x 1/ Required Reserve Ratio) to determine how much money could be created from an initial deposit of $5000 with a reserve requirement of 20%.

A

5000X(1/20%)=25000

Economics (5 decks)

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