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Macroeconomics
| Term | Definition |
|---|---|
| Frictional unemployment | when people enter the job market or are changing jobs |
| Structural unemployment | when an industry changes because of consumer tastes or technological changes |
| CIGXM | GDP method measurement that includes the balance of trade |
| CPI | measures inflation using price changes over time |
| Money multiplier | How banks create money using their excess reserves and interest |
| Boom | GDP cycle phase where the economy is growing |
| Peak | Highest GDP cycle phase with low unemployment and high CPI |
| Bust | GDP cycle phase where the economy is receding |
| Trough | Lowest GDP cycle phase with high unemployment and low CPI |
| Stagflation | Unique econ phenomenon when both unemployment and inflation are rising |
| Recession | a continuous 6-18 month economic contraction |
| Depression | a continuous 18+ month economic contraction |
| Fiscal policy | Government decisions that impact the collection of taxes and spending |
| Monetary Policy | Fed. Reserve decisions that affect the money supply |
| Federal Reserve | central banking system of the USA |
| Demand Pull inflation | demand for goods and services exceeds the production capacity of the economy |
| Cost Push inflation | changes in the cost of production of goods and services |
| Monetary inflation | caused by an excessive growth in the supply of money |
| Debt | Aggregate of years of overspending |
| Deficit | Government spending exceeds revenue collection |
| Demand Side | Keynesian, says government should spend when in recessions |
| Supply Side | Says businesses need incentives to spend; trickle down |
| Liquidity | ease with which an asset can be converted into money |
| Entitlement programs | Programs that are written into law such as social security and medicare |
| Regressive | tax type where more income = less taxes |
| Progressive | tax type where more income = more taxes |
| Proportional | tax type where equal percentages are applied to all |
| Sales tax | main source of state government revenue |
| Property Tax | main source of local government revenue |
| Income tax | main source of federal government revenue |
| Natural rate of unemployment | Combines structural & frictional but not cyclical |
| Hidden unemployment | Includes overqualified, part-time, or discouraged workers |
| Civilian Labor Force | number of people age 16 or older who are either employed or are unemployed, but actively looking for work |
| GDP | Adding everything made in the economy or by a specific country |
| Constant dollar GDP | The dollar value of GDP adjusted for inflation |
| Required Reserve Ratio | the amount of money that banks have to keep on hand |
Created by:
rfoster14
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