Gov. Econ. vocab 10-28 – Flashcards
Unlock all answers in this set
Unlock answersquestion
Purchasing Power
answer
a.)Purchasing power is the value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. b.)Purchasing power is important because, all else being equal
question
Deflation
answer
a.)Deflation is a general decline in prices, often caused by a reduction in the supply of money or credit. b.)Deflation can be caused also by a decrease in government,
question
Consumer Price Index
answer
a.)The Consumer Price Index (CPI) is an indicator of changes in consumer prices experienced by Canadians. b.)It is obtained by comparing, over time, the cost of a fixed basket of goods and services purchased by consumers.
question
Market Basket
answer
a.)At an economic level, a market basket is a permanent set of goods and services that are bought and sold as staples in a functional economy. b.)Analysts and policymakers use average price changes in a market basket as the primary gauge of inflation.
question
Base Year
answer
a.)A base year is the year used for comparison for the level of a particular economic index. b.)The arbitrary level of 100 is selected
question
Producer Price Index
answer
a.)The Producer Price Index (PPI) is a weighted index of prices measured at the wholesale, or producer level. b.)A monthly release from the Bureau of Labor Statistics
question
GDP Price Defelator
answer
a.)In economics, the GDP deflator (implicit price deflator) is a measure of the level of prices of all new, domestically produced, final goods and services in an economy. b.)GDP stands for gross domestic product
question
Real GDP
answer
a.)Real Gross Domestic Product (real GDP) is a macroeconomic measure of the value of economic output adjusted for price changes
question
Business Fluctuations
answer
a.)The term "business cycle" (or economic cycle or boom-bust cycle) refers to economy-wide fluctuations in b.)production, trade, and general economic activity.
question
Business Cycle
answer
a.)The business cycle is the fluctuation in economic activity that an economy experiences over a period of time. b.)A business cycle is basically defined in terms of periods of expansion or recession.
question
Peak
answer
a.)reach a highest point, either of a specified value or at a specified time.
question
Boom
answer
a.)Economic Boom: A boom is a period of rapid economic expansion resulting in higher GDP, b.)lower unemployment and rising asset prices.
question
Contraction
answer
a.)More specifically, contraction occurs after the business cycle peaks, but before it becomes a trough. b.)According to most economists, a contraction is said to occur when a country's real GDP
question
Recession
answer
a.)he NBER defines an economic recession as: "a significant decline in economic activity spread across the economy, b.)lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales."
question
Depression
answer
a.)in economics, a depression is a sustained, long-term downturn in economic activity in one or more economies. b.)It is a more severe downturn than an economic recession,
question
Trough
answer
a.)In economics, a trough is a low turning point or a local minimum of a business cycle. b.)The time evolution of many variables of economics exhibit a wave like behavior with local maxima
question
Expansion
answer
a.)An economic expansion is an increase in the level of economic activity, and of the goods and services available. b.)It is a period of economic growth as measured by a rise in real GDP.
question
Recovery
answer
a.)An economic recovery is the phase of the business cycle following a recession, b.)during which an economy regains and exceeds peak employment and output levels achieved prior to downturn.
