Graphic Models
Fluctuations in economic activity over time (GDP)
What is the Business Cycle?
The people inside a household
What is a family?
Another name for businesses
What is firms?
The tiny amount of money gov’t takes from households regularly
What is taxes?
Market where each sector saves and or borrows money
What is the financial Market?
A visual representation of how goods, services, & money move through different sectors of the economy
What is the Circular Flow Model?
This increases during an expansion period ($$$)
What is household income?
Provided to households via businesses
What is goods & services?
Causes a flow of funds in & out of the economy
Imports & exports
Market where consumers buy products and businesses sell those products.
What is the goods & services market?
The economy’s lowest point before recovery
What is a trough?
During a recession, this rate increases
What is the unemployment rate?
Businesses do this during a period of expansion
What is hire more workers, produce more goods, & or invest in new tech?
This gov’t action cools down an overheating economy
What is raising taxes?
The goods sent in and out of a country
What are imports & exports?
the interactions between households, firms, gov’t, & markets
What is shown in the circular flow?
The act of households using earned wages to buy goods & services
What is consumer spending?
The money businesses make from selling goods & services to other sectors
What is profit?
Money paid to households from the gov’t
What are gov’t transfer/financial programs?
Market that provides labor, land, capital, and entrepreneurship
What is the factor market?
The economy’s highest point before contraction/recession
What is a peak?
Households provide this in exchange for wages from businesses
What is labor?
During a recession, firms have to do this because they can no longer afford it
What is lay off workers?
Financial markets allow the gov’t to use their money with the idea that it will be paid back at a later time
What is gov’t borrowing?
The players involved in receiving imports/exports & the lending/borrowing of stock
What is the rest of the world?