Busy. Please wait.
Log in with Clever

show password
Forgot Password?

Don't have an account?  Sign up 
Sign up using Clever

Username is available taken
show password

Make sure to remember your password. If you forget it there is no way for StudyStack to send you a reset link. You would need to create a new account.
Your email address is only used to allow you to reset your password. See our Privacy Policy and Terms of Service.

Already a StudyStack user? Log In

Reset Password
Enter the associated with your account, and we'll email you a link to reset your password.
Didn't know it?
click below
Knew it?
click below
Don't Know
Remaining cards (0)
Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.

  Normal Size     Small Size show me how

AP Macro Unit 3

Physical Capital/Capital Goods technology, factories, machines, etc
Inventory stocks of goods and raw materials held to satisfy future sales; products available for sale
Government Purchases purchases of goods and services does not include transfer payments
Transfer Payments counted when people spend them as consumption
Disposable Income household income after taxes (the amount of households have to potentially spend); households with consume/spend it or save it
Marginal propensity to consume (MPC) the percentage of additional disposable income that is consumed by households; additional consumption divided by additional disposable income
Marginal propensity to save (MPS) the percentage of addition disposable income that is saved by households; additional savings divided by additional disposable income
Wealth money assets beyond regular income (ex. real estate/homes and financial investments like stocks and bonds)
Income wages and salary
Real Income Effect as the price level rises, households will spend a lower percentage of their disposable income because they will have less real income and vice versa
Multiplier Effect the amount of money available to spend in the economy increases, overall effect on aggregate demand/GDP will be greater than initial additional amount made available in the economy
Expenditure Multiplier shows what impact a change in autonomous spending will have on total spending and aggregate demand in the economy
Investment includes business spending on capital goods/physical capital, new spending on inventory, and households purchasing new homes
Net Exports the money value of exports minus the money value of imports
Exchange Rates how much of one currency can be bought for each unit of another currency
Fiscal Policy tax policy, government spending policy, and transfer payments
Monetary Policy FED/central bank’s control of the money supply and/or interest rates
Economies with Abundant Reserves economies that have central banks that focus on changing interest rates directly
Economies with Limited Reserves economies that have central banks that focus on changing the money supply as a way to indirectly influence interest rates
Administrative Rates interest rates under the control of the FED
Reserve Interest Rate the interest rate the FED pays on reserves (savings rate for banks)
Discount Rate interest rate the FED charges member banks for loans and cash advances
Expansionary Policy this type of monetary policy is used to lower interest rates in response to a recession
Contractionary Policy this type of monetary policy is used to raise interest rates in response to inflation
Open Market Operations refers to the buying and selling of government securities between a central bank and its member banks
Policy Rate a short term rate (often overnight) that banks charge one another to borrow funds
Federal Funds Rate (aka “Overnight Rate”) the interest rate at which depository institutions lend reserve balances to other depository institutions overnight on an uncollateralized basis
Recessionary Gap occurs when a country’s real GDP is lower than its GDP at full employment
Inflationary Gap occurs when a country’s actual GDP is greater than the potential GDP
Subsidies payments made by the government to businesses who produce certain products
Deregulation reducing or eliminating government regulation on businesses; lowers the cost of production and increase aggregate supply
Productivity the average amount of products produced by one worker (average number); can be improved through technology and human capital
Human Capital employee education and training
Cost of Production an increase will cause a drop in aggregate supply; a decrease will cause an increase in aggregate supply
Factors that Change Consumption changes in real wealth, changes in real income, future expectations
Factors that Change Investment interest rates (lower rates increases investment) and business confidence (degree of confidence in the future)
Positive Supply Shocks something that occurs that causes a lot more products to be produced. (Significant increase in Aggregate Supply)
Negative Supply Shocks something that causes a significant drop in the production of productions (Aggregate Supply)
Created by: rcooke
Popular Economics sets




Use these flashcards to help memorize information. Look at the large card and try to recall what is on the other side. Then click the card to flip it. If you knew the answer, click the green Know box. Otherwise, click the red Don't know box.

When you've placed seven or more cards in the Don't know box, click "retry" to try those cards again.

If you've accidentally put the card in the wrong box, just click on the card to take it out of the box.

You can also use your keyboard to move the cards as follows:

If you are logged in to your account, this website will remember which cards you know and don't know so that they are in the same box the next time you log in.

When you need a break, try one of the other activities listed below the flashcards like Matching, Snowman, or Hungry Bug. Although it may feel like you're playing a game, your brain is still making more connections with the information to help you out.

To see how well you know the information, try the Quiz or Test activity.

Pass complete!
"Know" box contains:
Time elapsed:
restart all cards