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Exam III
Terms for the Exam on Wednesday Apr. 5th
| Term | Definition |
|---|---|
| Aggregate Demand | the total demand for final goods and services in an economy |
| Aggregate Production Function | the relationship between all the inputs used in the macroeconomy and the economy's total output |
| Aggregate Supply | the total supply of final goods and services in an economy |
| Classical Economics | economists who stress the importance of aggregate supply and generally believe that the economy can adjust back to full-employment equilibrium on its own |
| Convergence | the idea that per capita GDPs across the nations equalize as nations approach the steady state. |
| Depreciation | a fall in the value of a resource over time |
| Diminishing Marginal Product | phenomenon occurring when the marginal product of an input falls as the quantity of the input rises |
| Great Depression | the worst economic downturn in the history of the industrialized world, lasting from 1929 to 1939 |
| Great Recession | the U.S. recession that lasted from December 2007 to June 2009 |
| Human Capital | the resource represented by the quantity, knowledge, and skills of the workers in an economy |
| Innovation | a new idea, method, or device / the introduction of something new |
| Institutions | a significant practice, relationship, or organization in a society; the official and unofficial conditions that shape the environment in which decisions are made |
| Keynesian Economics | economists who stress the importance of aggregate demand and generally believe that the economy needs help returning to full-employment equilibrium |
| Marginal Product | the change in output divided by the change in input |
| Natural Resources | the inputs used to produce goods and services; also called factors of production |
| Net Investment | investment minus depreciation |
| Physical Capital | consists of tangible, human-made objects that a company buys or invests in and uses to produce goods. |
| Private Property Rights | the rights of individuals to own property, to use it in production, and to own the resulting output |
| Recession | a short-term economic downturn |
| Rule of 70 | rule stating that if the annual growth rate of a variable is x%, the size of that variable doubles approximately every 70/ x years |
| Steady State | the condition of macroeconomy when there is no new net investment |
| Technology | the knowledge available for use in production |
| Unemployment Rate | condition occurring when a worker who is not currently employed is searching a job without success |
Created by:
jalicoolrip94
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