MacroEconomics Ch1

• Full Employment
• Non-inflationary economy
• Economic growth

• Fiscal Policy
• Monetary Policy

When the economy is producing to its maximum sustainable capacity; using labor, technology, land, capital and other factors of productions to their fullest potential.

An economy with stable prices. not inflationary or deflationary.

a measure of the rate of change that a nation's gross domestic product goes through from one year to another.

Is federal taxation and spending policies designed to level out the business cycle and achieve full employment, price stability and sustained growth in economy.

The Federal Reserve System (the FED) is influencing the cost and availability of credit keeping the objectives in mind. The FED regulates both interest rates and the nation's Money Supply.

Producing the maximum output with the given input.

The study of the allocation of resources in a society.

• What to Produce
• How to Produce (by what method)
• For Whom to Produce
• When to Produce

Consumer Price Index is a measure estimating the average price of consumer goods and services purchased by households. A consumer price index measures a price change for a constant market basket of goods and services from one period to the next within the same area (city, region, or nation).

Gross Domestic Product-The value of all finished goods and services produced domestically in a given time period.

The rate that banks charge each other for overnight borrowing.

The rate the Federal Reserve charges member banks for borrowing.

It did not take long for the US economy to slow.

Consumer Confidence Index is a monthly report detailing consumer attitudes and buying intentions, with data available by age, income and region.

5,000

$1.4 trillion during the fiscal year 2009.

lack of education

The cost of the best alternative forgone

A social science that identifies ways to allocate LIMITED RESOURCES to produce desired goods and services in order to satisfy people's unlimited wants. It is the science of scarcity.

• The belief that what is true for the part is necessarily true for a whole.
• The belief that what is true for the whole is necessarily true for the part.

a penny saved is a job lost....when society as a whole saves more, the result is a drop in the income but no increased savings.

• total income_D = consumption_D + saving^U
• less goods sold...less profit...more layoffs....less income=less consumption

Strives to explain what exists and how it works. No bias only Facts.

Looks at the outcomes of economic behavior and asks if they are good or bad, and whether they can be made better.

Causation Vs. Correlation - If Event A happens before Event B, then it is true that Event A caused Event B.

To be a better VOTER

Income tax