Economics, Credit 5 – Flashcards
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What is a durable good?
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An example is a used car
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What is a nondurable good?
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An example is a paperback book
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What is the amount of money a person has left of his or her income after taxes called?
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Disposal personal income
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In a typical business cycle, what stage immediately follows a peak?
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Contraction
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What is depreciation?
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An example is a worker's truck breaking down often after a certain mileage
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What is the difference between recession and depression?
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A depression is a particularly deepened recession with a high level of unemployment
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Why does higher saving lead to higher GDP in the future?
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More capital is available for investment leading to higher output
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What is the "market basket" that is used by the Bureau of Labor Statistics to calculate prices made up of?
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Typical goods and services in an urban household
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How has the distribution of income in the United States changed over the last 20 years?
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It has become less equal
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What do economists look to for explanation of inflation?
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Too much money in the economy, demands for goods exceed supply in wartime, and producers raise prices in order to meet increased costs
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When a nation imports more than it exports, economists say it has what?
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A trade deficit
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NAFTA?
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A treaty to eliminate all trade barriers between Canada, Mexico, and the US
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What is the primary measure of a country's development?
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Per capita gross domestic product
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What do the World Bank, the United Nations Development Program, and the International Monetary Fund do?
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Provide help to developing countries
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During the 1980s, the government of Great Britain privatized a number of businesses, including the post office and the telephone company. What did the government actually do?
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It sold government owned business to individuals
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Census
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an official count of the population
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inflation
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a price increase
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Discouraged worker
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a person who wants a job but gives up looking for one
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Unemployment rate
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percentage of the nations labor force that is not working
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Enterprise zone
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areas where companies can locate free of taxes and restrictions
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Food stamps
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government issued coupons that are redeemed for food
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Fixed income
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income that does not increase even when prices go up
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Price index
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a measurement that shows how the average price of a group of goods changes over time
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Chronic inflation
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inflation that rises steadily from month to month over a long period of time
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Deflation
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a sustained drop in the price level
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Frictional employment
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what occurs when people take time to find a job.
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Purchasing power
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the ability to purchase goods and services
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Poverty threshold
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the income level below which income is insufficient to support a family or a household
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Block grant
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federal funds given to states in lump sums
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Quantity theory
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the idea that too much money in the economy causes inflation
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Creeping inflation
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inflation that remains low for a long time
