Unit 1/2
Things that are desirable but not necessary for existence.
Wants
_______ is what happens to consumer spending when the aggregate price level changes
wealth affect
________ are cash and banking deposits such as checking and savings accounts that can be withdrawn easily
demand deposits
What shows the inverse relationship of wages and prices?
The Phillips curve
What ecompasses all transactions that countries individuals, businesses, and governments complete with the same entities in other countries
Balance of payment accounts
The trade-off value of one good or service for the value of another
Opportunity Cost
_______ refers to the percentage of aggregate new income not used for consumption
Marginal Propensity to Save
the nominal interest rate
What does the equation of exchange show?
MxV=PxT
What is the measure inflow and outflow of funds that impact a country's foreign assets and liabilities is
Capital and financial accounts
The ability to produce a good or service at a lower opportunity cost than another country
Comparitive Advantage
______ is the timeframe when price levels, wages, and contracts can adjust to the changes in the economy
Long-run aggregate supply
What is the measure of currency held by the public or in fully liquid demand deposits?
M1
spending exceeds revenues
budget deficit
What is a regime where a country's currency price is determined by the forex market, which is based on supply and demand
A floating exchange rate
Measures the total income earned through the factors of production-labor, land, capital, and entrepreneurship
The income appraoch
________ is an unforseen event or occurrence that causes an increase or decrease in demand for goods and services
Aggregate demand shock
a nations ______________ consists of the actions and communications its central bank takes to manage the nation's money supply an interest rate
monetary policy
How do you determine real GDP per Capita?
Real GDP/Population
What is a non-tariff barrier that affects the price levels, supply and demand, and the forex
import quota
A measurement used to determine price inflation and deflation in relation to a specific year
progressive taxation
a central bank buys or sells government bonds
open-market operations
what are government attempts to create a better climate for business through tax cuts and deregulation with the goal of increasing productivity and shifting the long-run aggregate supply curve to the right?
supply-side fiscal policies
What happens if a country exports more than it imports?
Trade surplus