Download Exam 2 | ECON - Macroeconomics 1 - Introduction and more Quizzes Introduction to Macroeconomics in PDF only on Docsity!
Recession
2 Consecutive quarters in which real GDP drops. TERM 2
GDP
DEFINITION 2 GDP final value of all goods and services in a given time period TERM 3
Inflation
DEFINITION 3 Inflation In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time. TERM 4
Deflation
DEFINITION 4 Deflation In economics, deflation is a decrease in the general price level of goods and services. TERM 5
disinflation
DEFINITION 5 disinflation Disinflation is a decrease in the rate of inflation - a slowdown in the rate of increase of the general price level of goods and services in a nation's gross domestic product over time.
Phillips curve
Phillips curve In economics, the Phillips curve is a historical inverse relationship between the rate of unemployment and the rate of inflation in an economy. TERM 7
stagflation
DEFINITION 7 stagflation Simultaneous high levels of unemployment and inflation TERM 8
frictional unemployment
DEFINITION 8 frictional unemployment natural rate of UE. .. People who are between jobs TERM 9
structural unemployment
DEFINITION 9 structural unemployment obsolete or out dated job skills Structural unemployment involves a mismatch between the sufficiently skilled workers looking for jobs and the vacancies available. TERM 10
cyclical unemployment
DEFINITION 10 cyclical unemployment tied to business cycle... Emerges during recession
MPC
MPC Marginal Propensity to consume TERM 17
MPS
DEFINITION 17 MPC Marginal Propensity to save TERM 18
Multiplier Effect
DEFINITION 18 Total impact of a change in govt spending/taxes by the time it works its way through the economy TERM 19
Progressive Tax
DEFINITION 19 Progressive Tax A progressive tax is a tax by which the tax rate increases as the taxable amount increases. TERM 20
Regressive Tax
DEFINITION 20 Regressive Tax A regressive tax is a tax imposed in such a manner that the tax rate decreases as the amount subject to taxation increases.
Flat Tax
Flat Tax A flat tax (short for flat rate tax) is a tax system with a constant tax rate. TERM 22
Expenditure Method
DEFINITION 22 Expenditure Method Takes all expenses in Economy +Personal Consumption 67% ($ spent @ wal mart, car dealer, movie theatre...) +Government Expenditures 18-25% +Gross Private Domestic Investments 8-12% ($ spent by businesses( % for capital)) +Net Exports (exports - imports) TERM 23
Import
DEFINITION 23 Import Foreign produced good/service consumed domestically Toyota sold in KY TERM 24
Export
DEFINITION 24 Export domestically produced good/service consumed in a foreign country Corvette sold in England balls TERM 25
Nominal GDP
DEFINITION 25 Nominal GDP GDP that hasnt been adjusted for changes in price level
