AcaDec - Economics

  1. Aggregate demand curve
    A graphical depiction of the relationship between the level of desired expenditures in an economy and the price level
  2. Aggregate supply curve
    A graphical depiction of the relationship between the quantity of goods and service firms wish to supply and the price level
  3. Agricultural Adjustment Act (AAA)
    A New Deal program that provided relief to farmers by reducing the acreage planted major crops and supported the prices of there crops
  4. Average labor Productivity
    Total output divided by the quantity of labor employed in its production
  5. Bank run
    A sudden rush of depositors seeking to withdraw funds from the banking system
  6. Barriers to entry
    Conditions that prevent firms from freely entering or exiting a market
  7. Business cycle
    Fluctuations in aggregate economic activity
  8. Capital goods
    Long-lived goods that are themselves produced and are used to produce other goods and services, but are not used up in the production process
  9. Cartel
    An agreement between suppliers to restrict production and raise prices
  10. Civilian Conservation Corps (CCC)
    A federal employment program during the New Deal that employed younger workers to work on wilderness conservation projects
  11. Coase Theorem
    The proposition that if private parties can bargain without cost over the allocation of resources, then they can solve the problem of externalities on their own
  12. Comparative advantage
    The ability to produce a good or service at the lower opportunity cost than other producers
  13. Competitive market
    A market with many buyers and sellers trading a homogenous good or service in which each buyer and seller is a price taker
  14. Complements
    Two goods for which a rise in the price of one leads to a decline in the demand for the other
  15. Consumer Price Index (CPI)
    An index constructed by comparing the cost of purchasing a fixed basket of goods at different times
  16. Consumer surplus
    The difference between the amount that a buyer would be willing to pay for a good or service and the price actually paid
  17. Consumption
    Spending by households on goods and services, with the exception of the purchase of new housing
  18. Contraction
    The phase of a business cycle in which the economy is growing more slowly that its long-run average
  19. Crowding out
    The decrease in private investment that occurs as a result of a reduction in government saving or an increase in government borrowing
  20. Currency
    Coins and bills in the hands of the public
  21. Cyclical unemployment
    Unemployment caused by deviations of output from its potential level
  22. Dawes Plan
    An international agreement that went into effect in 1924 that was designed to end German hyperinflation and enable Germany to make reparations payments as specified by the Versailles Treaty
  23. Deadweight loss
    The reduction in total surplus that results from a market distortion such as a tax
  24. Demand curve
    A graphical representation of the quantity of a good or service demanded as a function of the price
  25. Demand schedule
    A table showing the relationship between the price of a good or service and the quantity demanded
  26. Depression
    A severe recession
  27. Diminishing returns to scale
    The property whereby each additional increase in inputs results in a smaller increase in the quantity produced
  28. Discount rate
    The interest rate that the Federal Reserve charges banks when they must borrow reserves from it
  29. Economic profit
    The difference between the revenue realized by a producer and the opportunity cost of production
  30. Elasticity
    The percentage change in a quantity demanded or supplied as a result of a one percent change in price
  31. Entrepreneur
    An individual who takes on the risk of attempting to create new products or services, establish new markets, or develop new methods of production
  32. Equilibrium
    A situation in which the forces in a system are in balance so that the situation is stable and unchanging
  33. Excludability
    The ability to prevent buyers from enjoying the benefits of consuming a good or service without paying for it
  34. Expansion
    The phase of the business cycle in which the economy is growing more quickly that its long-run average
  35. Externality
    When the action of one person affects the well-being of someone else, but where neither party pays nor is paid for these effects
  36. Fair Labor Standards Act
    Legislation pass in 1938 that established a federal minimum wage, prohibited the employment of children younger than sixteen, and established overtime pay for a workweek over forty-four hours
  37. Federal Emergency Relief Agency (FERA)
    A New Deal agency created to channel funds to state and local relief efforts
  38. Federal funds rate
    The rate that banks charge other banks when they lend reserves
  39. Final goods
    Goods or services that are purchased by their ultimate user
  40. Financial markets
    The institutions through which individuals with saving can supply these funds to persons or firms that wish to borrow money to purchase consumption goods or invest in physical capital
  41. Fiscal policy
    The use of taxes and spending to influence aggregate demand and through it the level of overall economic activity
  42. Fixed cost
    A cost of production that is independent of the quantity produced
  43. Foreign direct investment
    When a company or individual acquires assets in a foreign country that they will manage directly
  44. Frictional unemployment
    Unemployment that results because it takes time for workers to search for the jobs that are best suited to their tastes and skills
  45. Gains from trade
    The benefits that both individuals or nations realize from mutually beneficial exchange
  46. Gold standard
    An international exchange rate system in which national governments or central banks commit to the convertibility of their currency into gold at a fixed exchange rate
  47. Government purchases
    Spending on goods and services by federal, state, and local governments
  48. Gross Domestic Product (GDP)
    The market value of final goods and services produced in an economy during a specified period of time
  49. Human capital
    Skills and experience that are acquired through education, training, and on the job experience that increase a worker’s productivity
  50. Imperfect competition
    The case of a market with a small number of sellers, so that sellers have market power
  51. Inferior good
    A good for which the quantity demanded falls as buyers’ income increases
  52. Inflation
    A general increase in prices
  53. Institutions
    Formal and informal rules that structure human interactions
  54. Intermediary
    A third party who acts as a link between two others who wish to transact business
  55. Intermediate good
    A good or service that is used in the process of producing other goods and services
  56. Investment
    Spending on capital equipment, inventories, and structures, including household purchases of new housing
  57. Keynesian model
    A model of short-run aggregate economic fluctuations inspired by the analysis of British economist John Maynard Keynes, which attributes short-run deviations in output from potential to variations in the level of aggregate demand or aggregate supply
  58. Labor force
    The sum of those individuals who are employed and those who are seeking paid work but have not found it
  59. Labor force participation rate
    The fraction of the working-age population who are in the labor force
  60. Law of demand
    Holding other things equal, the quantity demanded is negatively related to the price
  61. Law of supply
    Holding other thing equal, the quantity supplied is positively related to the price
  62. Liquidity
    The ease with which a nonmonetary asset may be converted into money
  63. Logrolling
    The practice of elected officials trading votes
  64. Marginal cost
    The additional cost of production associated with a small increase in the quantity produced
  65. Marginal revenue
    The additional revenue resulting from a small increase in the quantity produced
  66. Market failures
    Conditions in which a competitive market fails to produce a socially effective outcome
  67. Market power
    The situation in which a producer knows that changes in the quantity produced will alter the price at which the good or service can be sold
  68. Monetary base
    The quantity of currency plus bank reserves
  69. Monetary policy
    The use of the supply of money in the economy by the Federal Reserve to influence the level of aggregate demand
  70. Money
    An asset that is a medium of exchange, unit of account, and store of value
  71. Money multiplier
    The ratio of the money supply to the monetary base
  72. Money supply
    The quantity of money available to the economy
  73. Monopolistic competition
    A market in which there is free entry or exit, but every producer supplies a differentiated product and faces a downward sloping demand curve
  74. Monopoly
    A market in which there is a single producer
  75. National Industrial Recovery Act (NIRA)
    A New Deal program that established industry codes of conduct intended to reduce output and raise prices and wages
  76. National Labor Relations Act
    Legislation passed in 1935 that protected the right of workers to bargain collectively; also referred to as the Wagner Act
  77. Natural rate of unemployment
    The level of unemployment that would exist if the economy were producing at its potential output
  78. Net capital outflow
    The difference between the purchases of foreign assets by domestic residents and the purchases of domestic assets by foreign residents
  79. Net exports
    The difference between the value of goods and services sold to foreigners and the value of goods and services purchased from foreigners
  80. Neutrality of money
    The proposition that in the long run, changes in the quantity of money affect the price level but do not affect any real quantities
  81. New Deal
    The name given to the policies introduced by President Franklin D. Roosevelt to combat the Great Depression
  82. Nominal GDP
    The production of goods and services valued at current prices
  83. Normal good
    A good or service for which demand is positively related to the buyer’s income
  84. Normative economics
    Economic analysis used to guide decisions about what should be as opposed to what is the case
  85. Okun’s law
    A relationship identified by Arthur Okun between the output gap and the level of cyclical unemployment
  86. Oligopoly
    A market in which there are just a few producers
  87. Open market operations
    A tool used by the Federal Reserve to adjust the money supply by buying or selling U.S. government bonds in the financial market
  88. Opportunity cost
    The cost of any choice is what must be given up by making that choice
  89. Output gap
    The difference between actual output and potential output
  90. Pareto efficiency
    Describes an allocation in which the only way to make any individual or group of individuals better off would require making at least one other person worse off
  91. Per capita
    Literally per head, used to denote an average value for a population
  92. Portfolio investment
    The purchase of shares of stock or bonds
  93. Positive economics
    The use of the tools of economic analysis to describe and explain economic phenomena and to make predictions about what will happen under particular circumstances
  94. Potential output
    The quantity of output that would be produced by an economy if all of its resources were being employed at normal rates
  95. Price discrimination
    When a business sells the same product to different buyers at different prices
  96. Producer surplus
    The difference between the price that producers receive for supplying a good and their marginal cost of producing it
  97. Production possibility frontier (PPF)
    A graphical depiction of the combinations of output that can be produced by an economy
  98. Public good
    A good or service for which is it not possible to establish individual property rights
  99. Rationality
    When individual choices are made by comparing the benefits and costs of different actions and then selecting the action that produces that greatest benefit
  100. Real GDP
    The production of goods and services valued at constant prices
  101. Rent seeking
    Using political influence to increase one’s economic profits at the expense of others
  102. Reserve requirement
    The amount of reserves that the Federal Reserve requires banks to hold
  103. Reserves
    The fraction of deposit liabilities that banks hold to meet depositor withdrawals
  104. Rival goods
    Goods or services characterized by the fact that one person’s enjoyment of the good orservice reduces the quantity available for others’ enjoyment
  105. Savings
    The difference between a person’s disposable income and his or her expenditures
  106. Scarcity
    An Inescapable fact of human existence that results from the fact that the available resources are always less than our limitless desires
  107. Structural unemployment
    Unemployment that results from the mismatch in skills, locations, or other important characteristics between job seekers and the available jobs
  108. Substitutes
    Two goods for which an increase in the price of one leads to an increase in the demand for the other
  109. Supply curve
    A graphical representation of the quantity of a good or service supplied as a function of the price
  110. Supply Schedule
    A table showing the relationship between the price of a good or service and the quantity supplied
  111. Technology
    Knowledge about the techniques by which inputs are transformed into the goods and services that households desire
  112. Total revenue
    The total revenue received by a supplier
  113. Total surplus
    The sum of consumer and producer surplus
  114. Tragedy of the commons
    The depletion of a common resource due to overuse
  115. Treaty of Versailles
    The agreement that ended the First World War
  116. Unemployment
    The state of actively seeking paid work but being unable to find it
  117. Unemployment rate
    The number of unemployed workers as a fraction of the total labor force
  118. Variable cost
    A cost of production that depends on the quantity produced
  119. Velocity of money
    The ratio of nominal GDP to the money supply; in effect, the average number of transactions supported by each dollar of the money supply
  120. Wealth
    The total value of assets used as a store of value
  121. Works Projects Administration (WPA)
    A federal program during the New Deal that directly employed artists, writers, photographers, and other workers on a variety of cultural projects; it also employed workers in the construction of a variety of public works projects such as roads and flood control dams
Card Set
AcaDec - Economics
AcaDec - Economics