Macroeconomics Cards

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Macroeconomics
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The study of the economy as a whole.
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gross domestic product (GDP)
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the dollar value of all final goods and services produced within the country’s borders in a given year
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consumer price index (CPI)
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a measure of the overall cost of the goods and services bought by a typical consumer
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Inflation
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rise in the general level of prices.
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Deflation
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Sustained fall in the general price level.
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Stagflation
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High unemployment and high inflation at the same time
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National Debt
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the total amount of money owed by a nation’s government to its creditors.
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national deficit
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the difference between the amount a government brings in through taxes and sends out through spending
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economic growth
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when a nation’s total output of goods and services increases over time
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cyclical unemployment
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unemployment caused by a business cycle recession
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Structural Unemployment
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unemployment resulting from a poor match of workers’ abilities and skills with current requirements of employers
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Frictional Unemployment
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people who are temporarily between jobs (including those new to the work force)
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seasonal unemployment
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when people lose their jobs predictably every year at the same time
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Fiscal policy
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Use of government spending and revenue collection measures to influence the economy.
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monetary policy
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policies that control the supply of money, the price of money and the availability of credit.
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aggregate demand
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the total demand for goods and services in the economy
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Aggregate supply
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The total quantity of output producers are willing and able to supply at alternative price levels in a given time period.
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business cycle
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* the ups and downs (phases) through time of the level of overall economic activity (real GDP)
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Expansion
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A period in which real GDP, income, and employment rise
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recession
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an extended decline in business activity
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Depression
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a sharp reduction in an economy’s total output accompanied by high unemployment lasting more than a year.
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The Federal Reserve
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The central monetary authority of the US
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The Federal Open Market Operations Committee
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decides how monetary policy should be carried out by the federal reserve
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reserve requirement
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a percentage of commercial banks’ checking and savings accounts that must be physically kept in the bank
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open market operations
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the purchase or sale of US government securities (Bonds) by the Fed
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tight money policy
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monetary policy that makes credit expensive and in short supply in an effort to slow the economy
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Loose money policy
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monetary policy that makes credit inexpensive an abundant, possibly leading to inflation
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Contraction
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Period of economic decline

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