Unit 1 & 2
The study of how people and societies use limited resources to satisfy their unlimited wants.
What is economics?
When the currency lincreases in value compared to other currencies, giving people who have that currency stronger buying power.
What is appreciate?
Investments traded on the secondary market, also known as the stock market.
Achieved when tax revenues are adequate to cover government expidentures.
What is balanced budget?
When the value of one country's currency increases in relation to another country's currency.
What is currency appreciation?
What is entrepreneurship?
Payments to individuals with no goods or services provided in return.
What are government transfers?
Something that buyers give to sellers when they purchase goods and services. When you buy a pair of jeans, you give the store money, and the store gives you jeans.
What is medium of exchange?
The ownership and control of a specific good or resource that goes to the very heart of how a market economy works.
What is property rights?
Also called the forex, this is not a physical place, it is an electronic marketplace accessible to countries around the world.
What is the foreign exchange market?
Where consumers exchange goods and services with producers.
What is the product market?
Also called maximum sustainable capacity or the potential output-level of real GDP if all prices and wages were fully flexible and used efficiently.
What is full-employment output?
Originally was limited to people who shared a common bond, but today allow the general public to join. They are often grouped with Thrifts, but since they are nonprofit organizations, they have advantages.
What is credit unions?
When a country's actual economic output is higher than its potential output, leading to an economy operating above its sustainable capacity.
What is expansionary gap?
Also called net exports, demand plays a big role in this export/import term.
What is balance of trade?
This describes the relationship between the quantity of goods and services that are demanded and the price.
What is the law of demand?
When nominal wages are slow to rise or fall in response to changes in the economy.
What is sticky wages?
In times of economic downturn or recession, a central bank will want to adopt this policy to increase the money supply and lower interest rates.
What is expansionary policy?
A vertical line at the natural rate of unemployment.
What is the long-run Phillips curve?
The movement of monetary funds and financial capital between open economies.
What is international capital flows?
What is a table showing the relationship between the price of a good and service and the quantity supplied when all other determinants are equal is called?
What is a supply schedule?
When the amount of aggregate output supplied by producers equals the aggregate demand by consumers, businesses, and governments.
What is short-run macroeconomic equilibrium?
The Fed sets this percentage of deposits a bank must hold in reserve, as either cash or in deposits with Federal Reserve Banks.
What is the reserve requirement?
The adverse effects of public sector borrowing on the private sector. This occurs when a government's expansionary fiscal policy increases the budget deficit.
What is crowding out?
Was implemented in 1930 to increase tariffs to about 60 percent on converted goods, though it aslo increased the number of goods not covered.
What is the Smoot-Hawley Act?