Macro-Economics Vocabulary

  1. (MT)Develops rules and principles of economics and is a guide for action under a given set of circumstances.
    Economic Theory
  2. a government policy for maintaining economic growth and tax revenues
    Economic policy
  3. Goods used to produce other goods and services.
  4. Exonomic goods used to produce other consumer or capital goods.
    Capital Goods
  5. The stock of labor talents and skills used to increase productivity.
    human capital
  6. the amount by which the stock of capital (plant, machinery, materials, etc.) in an enterprise or economy changes
  7. Avoidance of excess expenditure; economy.
     A reduction in expenditure or cost
     Something saved.
  8. wages evaluated with reference to their purchasing power rather than to the money actually paid Compare money wages
    real income
  9. the value of the next-best alternative that must be sacrificed when a choice is made.
    opportunity cost
  10. the amount, expressed as a percentage, that is earned on a company's total capital calculated by dividing the total capital into earnings before interest, taxes, or dividends are paid
  11. the ability of a party (an individual, a firm, or a country) to produce a particular good or service at a lower opportunity cost than another party. It is the ability to produce a product with the highest relative efficiency given all the other products that could be produced.[1][2] It can be contrasted with absolute advantage which refers to the ability of a party to produce a particular good at a lower absolute cost than another.
    comparative advantage
  12. (MT) an economy based on the power of division of labor in which the prices of goods and services are determined in a free price system set by supply and demand
    Market economy
  13. (MT) when revenue exceeds the opportunity cost of inputs.
  14. (MT)the effort of two or more parties acting independently to secure the business of a third party by offering the most favorable terms
  15. (MT) is a type of business entity that is owned and run by one individual and in which there is no legal distinction between the owner and the business. The owner receives all profits (subject to taxation specific to the business) and has unlimited responsibility for all losses and debts. Every asset of the business is owned by the proprietor and all debts of the business are the proprietor's. This means that the owner has no less liability than if they were acting as an individual instead of as a business. It is a "sole" proprietorship in contrast with partnerships.
    sole proprietorship
  16. an arrangement where entities and/or individuals agree to cooperate to advance their interests. In the most frequent instance, a partnership is formed between one or more businesses in which partners (owners) co-labor to achieve and share profits or losses.
  17. (MT)any corporation that, under United States federal income tax law, is taxed separately from its owners. A C corporation is distinguished from an S corporation, which generally is not taxed separately. Most major companies (and many smaller companies) are treated as C corporations for U.S. federal income tax purposes.
  18. (MT)do not pay any federal income taxes. Instead, the corporation's income or losses are divided among and passed through to its shareholders. The shareholders must then report the income or loss on their own individual income tax returns.
  19. (MT)An economy that contains a mixture of perfect and imperfect competition and of regulated and unregulated industries.
    mixed economy
  20. When a government-owned business is sold and becomes a privately-owned business.
  21. (MT)An economy where the central authority makes most of the decisions gegarding production and consumption.
    command economy
  22. (MT)an economic model of price determination in a market. It concludes that in a competitive market, the unit price for a particular good will vary until it settles at a point where the quantity demanded by consumers (at current price) will equal the quantity supplied by producers (at current price), resulting in aneconomic equilibrium of price and quantity
    supply and demand
  23. is the decrease in the marginal (per-unit) output of a production process as the amount of a singlefactor of production is increased, while the amounts of all other factors of production stay constant.
    principle of diminishing return
  24. A market structure in which only one producer or seller eists for a product that has no close substitutes.
  25. A market structure in which there are many buyers offering differentiated conditions to sellers.
    Monopolistic competition
  26. An organization of independent firms that agree to operate as a shared monopoly by limiting production and changing the monopoly price.
  27. A federal law passed in 1914 creating the FTC to police unfair business practices.
    Federal Trade Commission Act
  28. the theory that consumers should contribute taxes consistent with their ability to pay.
    Ability to pay theory
  29. a rise in a currency's value brought about by a change in the supply and demand of that currency.
  30. A statistic of financial transactions between nations during one year.
    Balance of Payments
  31. The exports and imports a country experiences for one year in trade with other nations,
    Balance of Trade
  32. The rise and fall of economic activity relative to the economy's long-term growth trend.
    Business Cycle
  33. The cyclical operation of demand, output, income, and new demands.
    Circular Flow of Income
  34. All persons in the total labor force except members of the resident armed services.
    Civilian Labor Force
  35. A statistic that compares the price of a group of products and services as purchased over time.
    Consumer Price Index (CPI)
  36. A separate legal entity, apart from its owners or shareholders, which functions as a business.
  37. Inflation characterized by a spiral of wage and benefit cost increases and price increases.
    Cost-Push Inflation
  38. unemployment that arises from the less than full use of productive capacity in an economy due to a recession or depression.
    Cyclical Unemployment
  39. A persistent decline in the level of prices.
  40. Demand exceeds supply and thus prices go up.
    Demand-Pull inflation
  41. The interest rat the Federal Reserve System charges member banks to borrow money.
    Discount Rate
  42. A slowdown in the inflation rate
  43. An object or service that has utility, is scarce, and is transferable.
    Economic Goods
  44. U.S. dollars deposited in U.S. bank foreign branches.
  45. The value of one nation's currency compared to another country
    Exchange Rate
  46. The 1913 act that established a central banking system in the United states.
    Federal Reserve Act
  47. A system composed of various bodies, organizations, and committees for regulating the U.S. money supply.
    Federal Reserve System
  48. Money that can be used to purchase capital goods.
    Financial capital
  49. A decrease in federal spending.
    Fiscal Drag
  50. The federal government spending more money.
    Fiscal Stimulus
  51. Each minute currencies change value when compared to each other.
    Floating Exchange Rates
  52. When 94% to 95% of the labor force is employed.
  53. Use of gold as the basis for defining the value of various currencies.
    Gold Standard
  54. The current market value of the total final goods and services produced within the United States.
    Gross Domestic Product (GDP)
  55. GDP plus the value of goods and services produced by U.S. resources abroad less the value of goods and services produced by foreign resources in the United states.
    Gross National Product (GNP)
  56. Inflation that feeds on itself to go out of control, creating severe distortions in the economy and rendering currency almost worthless.
  57. A persistent increase in prices.
  58. The civilian labor force expressed as a percentage of the civilian noninstitutional population.
    Labor Force Participation Rate
  59. A group of 1 indees whose upward and downward turning points generally precede the peaks and troughs of general business activity.
    Leading Indicators
  60. Deals with the exonomic problems of the individual, the firm, and the industry.
  61. When a dollar is spent in a community, it will be respent one or two more times. One new manufacturing job will create two retail jobs in a community. One new retail job will create 1/2 new jobs too.
  62. Where two or three compainies dominate an industry.
  63. The Fed's continuous purchase and sale of government securities on the open market.
    Open-market Operations
  64. A curve showing the relationship between unemployment and inflation.
    Phillips Curve.
  65. GDP as expressed in dollars after the deduction of inflation.
    Real GDP
  66. The amount of money a member bank must hold against its excess reserves.
    Required Reserves
  67. The relationship between the amount of disposable income consumers receive and the amount they save.
    Saving Function
  68. People unemployed because an industry dies and people are without new skills.
    Structural Unemployment
  69. a Duty or tax levied on foreign imports.
  70. The percentage of income that is taxable.
    Tax Base
  71. The percentage rate that you are taxed.
    Tax Rate
  72. All persons in the noninstitutional population who are either working or seeking work.
    Total Labor Force
  73. A tax placed on an item as it moves from one point of production until it reaches the consumer.
    Value Added Tax
Card Set
Macro-Economics Vocabulary
Macro Economics vocabulary