Economics Ch. 14 Vocab – Flashcards
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business cycles
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largely systematic ups and downs of gdp
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business fluctuations
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the rise and fall of real gdp over time in a no systematic manner
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recession
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a period in which real gdp declines for two quarters in a row or six consecutive months; first phase
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peak
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the point where real gdp stops going up
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trough
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the turnaround point where real gdp stops going down
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expansion
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a period of recovery from a recession; second phase
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trend line
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steady growth oath
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depression
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a state of the economy with large numbers of people out of work, acute shortages, and excess capacity in manufacturing plants
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depression scrip
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own money; towns printed own money when money supply fell
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econometric model
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macroeconomic model that uses algebraic equations to describe how the economy behaves
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index of leading indicators
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used to predict the turning points of business cycles; monthly statistical series that usually turns down before real gdp turns down and turns up before real gdp turns up
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unemployef
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people available for work who made a specific effort to find a job during the past month and who during the most recent survey week worked less than one hour for pay or profit
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unemployment rate
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the number of unemployed individuals divided by the total number of persons in the civilian labor force
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frictional unemployment
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unemployment caused by workers who are between jobs for one reason or another
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structural unemployment
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unemployment that occurs when a fundamental change in the operations of the economy reduces the demand for workers and their skills
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cyclical unemployment
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unemployment directly related to swings in the business cycle
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seasonal unemployment
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unemployment resulting from changes in the weather or changes in the demand for certain products
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technological unemployment
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unemployment caused when workers with less skills, talent, or education are replaced by machines and other equipment that do their jobs
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automation
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production with mechanical or other processes that reduce the needs for workers
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price level
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the relative magnitude of prices at one point in time
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deflation
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a decrease in the general price level
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creeping inflation
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inflation in the range of 1 to 3 percent per year
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galloping inflation
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a more intense form of inflation that can go as high as 100 to 300 percent
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hyperinflation
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inflation in the range of 500 percent a year and above
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Lorenz curve
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a curve that shows how much the actual distribution of income varies from an equal distribution
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poverty guidelines
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annual dollar amounts used to evaluate the money income that families and unrelated individuals receive
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welfare
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economic and social programs that provide regular assistance from the government or private agencies because of need
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food stamps
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government issued coupons that can be redeemed for food
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earned income tax credit (eitc)
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provides federal tax credits and sometimes cash to low income workers
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enterprise zones
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areas where companies can locate free of some local, state and federal tax laws and other operating restrictions
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workfare
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program that requires welfare recipients to exchange some of their labor for benefits
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negative income tax
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a proposed type of tax that would make cash payments to certain groups below the poverty line
