economy is unstable and eventually the gov needs to assist

Alternating periods of economic growth and contraction. unpredictable

The total quantity of output (real GDP) demanded at alternative price levels in a given time period,

A decline in total output (real GDP) for two or more consecutive quarters.

An increase in the average level of prices of goods and services.

A period during which real GDP grows but at a rate below the long-term trend of 3 percent so gdp contracts and

unexpected events that impact an economy such as disasters

If wages and prices are flexible, a recession is best eliminated when prices

and wages fall b/c things get affordable to both businesses and consumers

output, ,jobs, prices, growth, internal balances

determinants of macro economy

internal market forces, external shocks, and policy levers

Average propensity to spend

Total consumption in a given period divided by total disposable income.

MPC marginal propensity to consume

it measure the proportion of an additional dollar of income that a person is likely you spend rather than save it. is the change in consumption divided by the change in income.

mpc= change in consumption/ change in disposable income

autonomous consumption

Consumer spending not dependent on current income.

consumption function formula

c=a+bYD c=current consumption a=autonomous yd= disposable income b=marginal propensity to consume

An addition of spending to the circular flow of income. gov spending, exports, investment

income not spent directly on domestic output but instead diverted from the circular flow—for example, saving, imports, taxes.

too much demand so raising taxes

unexpected events that come from outside the country

internal market forces

supply and demand within a nation

the use of gov spending and taxation to influence the economy

managing the money supply and interest rates

gov measures aimed at increasing the productive capacity of the economy such as tax cuts

consumption function definition

A mathematical relationship indicating the rate of desired consumer spending at various income levels.

Help

Options

focusNode

Didn't know it?
click below

Knew it?
click below

Don't Know

Remaining cards (0)

Know

retry

shuffle

restart

0:00

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

econ test :(

Question	Answer
says law	supply creates it's own demand
keynes	economy is unstable and eventually the gov needs to assist
business cycle	Alternating periods of economic growth and contraction. unpredictable
aggregate demand	The total quantity of output (real GDP) demanded at alternative price levels in a given time period,
recession	A decline in total output (real GDP) for two or more consecutive quarters.
inflation	An increase in the average level of prices of goods and services.
growth recession	A period during which real GDP grows but at a rate below the long-term trend of 3 percent so gdp contracts and
classical theory	leave it alone
external shocks	unexpected events that impact an economy such as disasters
If wages and prices are flexible, a recession is best eliminated when prices	and wages fall b/c things get affordable to both businesses and consumers
macro outcomes	output, ,jobs, prices, growth, internal balances
determinants of macro economy	internal market forces, external shocks, and policy levers
Average propensity to spend	Total consumption in a given period divided by total disposable income.
MPC marginal propensity to consume	it measure the proportion of an additional dollar of income that a person is likely you spend rather than save it. is the change in consumption divided by the change in income.
Mpc formula	mpc= change in consumption/ change in disposable income
autonomous consumption	Consumer spending not dependent on current income.
consumption function formula	c=a+bYD c=current consumption a=autonomous yd= disposable income b=marginal propensity to consume
expenditures	consumption
injection	An addition of spending to the circular flow of income. gov spending, exports, investment
leakage	income not spent directly on domestic output but instead diverted from the circular flow—for example, saving, imports, taxes.
cyclical unemployment	too little demand=less jobs
full unemployment	4-6% with price stability
over heating means	too much demand so raising taxes
external shocks	unexpected events that come from outside the country
internal market forces	supply and demand within a nation
fiscal policy	the use of gov spending and taxation to influence the economy
monetary policy	managing the money supply and interest rates
supply side policy	gov measures aimed at increasing the productive capacity of the economy such as tax cuts
what is the consumption function married to?	the demand curve
consumption function definition	A mathematical relationship indicating the rate of desired consumer spending at various income levels.

Created by: alexisda

"Know" box contains:
Time elapsed:
Retries: