Let's Make a Deal!
Patents, regulations, economies of scale, and high startup costs are examples of these obstacles to entering a market.
Barriers of entry
These government policies automatically help reduce the severity of recessions by increasing benefits or reducing taxes without new laws being passed.
automatic stabilizers
An economy growing too quickly and causing inflationary pressure is said to be doing this.
overheating
This policy tool involves central banks adjusting interest rates to influence the economy.
Monetary Policy
This type of unemployment occurs because workers’ skills no longer match available jobs.
structural unemployment
This international organization oversees global trade rules and resolves trade disputes.
WTO
This curve suggests an inverse relationship between inflation and unemployment.
Phillips curve
This happens when a currency loses value relative to another currency.
Depreciation
Under this exchange rate system, currency values are determined freely by market forces.
floating exchange rate
This term describes setting aside part of income for future use rather than spending it immediately.
Savings
This international flow of trade, investment income, and transfers is measured by this account in the balance of payments.
Current Account
A period of falling economic output lasting several months is known as this.
Recession
This Keynesian concept explains how an initial increase in spending creates a larger overall increase in economic activity
multiplier effect
A government-issued financial asset that promises regular payments and repayment at maturity is called this
Bond
Economic activities not officially recorded by the government are part of this economy.
Informal Economy, System D, Black Market
A country experiences this when imports and payments abroad exceed exports and income inflows.
current account deficit
The return earned for lending money, or the cost of borrowing money, is known as this.
This form of inflation occurs when production costs rise and reduce aggregate supply.
cost-push inflation
This index measures changes in the average prices consumers pay for goods and services.
Consumer Price Index (CPI)
This type of unemployment occurs when workers are temporarily between jobs.
Frictional
Common name for this South American trade bloc also known as the Southern Common Market
Mercosur
The difference between an economy’s actual output and its potential output is called this.
Output gap
This type of government policy involves raising taxes or cutting spending to reduce demand in the economy.
Fiscal Tightening
Government purchases of bonds to inject money into the economy are known as this policy.
quantitative easing
This concept describes a situation where poor individuals cannot improve their economic circumstances due to systemic barriers.
Poverty trap