Economic Activity
AD/AS
Unemployment
Inflation
Equity in Distribution of Income
Government Intervention
200
Money, goods, and services flowing through the economy.
What is the Circular Flow of Income?
200
Total demand for all goods and services in an economy.
What is Aggregate Demand?
200
All people of working age that are not working and are actively looking for a job.
What is Unemployment?
200
An increase in the general price level.
What is Inflation?
200
Fair distribution of income.
What is Equity?
200
Government intervention by either adjusting taxes or adjusting government spending.
What is Fiscal Policy?
200
Total income earned by the factors of production in a country, regardless of who owns the assets.
What is Gross Domestic Product (GDP)?
200
Total amount of goods and services that all industries in the economy will produce at a given price level.
What is Aggregate Supply?
200
Decrease in aggregate demand causes production to decline and people to lose their jobs.
What is Cyclical Unemployment?
200
A persistent fall in the rate of inflation.
What is Disinflation?
200
Equal distribution of income.
What is Equality?
200
Central bank intervention by adjusting interest rates or money supply.
What is Monetary Policy?
200
The total income earned by a country's factors of production, regardless of where the assets are located.
What is Gross National Product/Income (GNP/GNI)?
200
The point where aggregate demand meets aggregate supply.
What is (macro) Equilibrium?
200
Permanent changes in demand and supply causes people in certain industries to become obsolete.
What is Structural Unemployment?
200
A consistent fall in the level of prices.
What is Deflation?
200
Tax system where those that earn more, are taxed more.
What is a Progressive Tax System?
200
Two tools the Federal Reserve can use to achieve a stable inflation rate.
What are adjusting the key interest rate and open-market operations?
200
GDP minus environmental costs, such as pollution, measures sustainability.
What is Green GDP?
200
When aggregate demand falls below potential output (LRAS), this occurs.
What is a Deflationary Gap?
200
Lower labor demand at certain times of the year.
What is Seasonal Unemployment?
200
An increase in aggregate demand (AD) causes the price level to rise.
What is Demand-Pull Inflation?
200
The inability to fulfill the basic economic needs.
What is Absolute Poverty?
200
Government intervention by affecting the production side of the economy.
What are supply-side policies?
200
The economy tends to go through a cyclical pattern of Real GDP development. Phases include recovery, boom, recession, and trough.
What is the Business Cycle?
200
When aggregate demand exceeds potential output (in the short-run).
What is an Inflationary Gap?
200
Imperfect information: it takes time to find a new job when you have left your old one.
What is Frictional Unemployment?
200
When costs of production increase for some reason, this causes an increase in the price level.
What is Cost-Push Inflation?
200
Being poor relative to others around you.
What is Relative Poverty?
200
Supply-side policies that focus on reducing competition and encouraging free-markets.
What are Market-Based supply-side policies?