Gross Domestic Product (GDP)
Consumer Price Index (CPI)
Money Supply (M2)
Aggregate Demand (AD)
A. Gross Domestic Product (GDP)
Policies that aim to increase the productive capacity of the economy
Policies that aim to increase aggregate demand in the economy
Policies that aim to control inflation through monetary policy
Policies that aim to control inflation through fiscal policy
8%
2%
3%
5%
An increase in the overall price level of goods and services in an economy
A decrease in the overall price level of goods and services in an economy
An increase in the purchasing power of a currency
A decrease in the purchasing power of a currency
Gini coefficient
Consumer Price Index (CPI)
Producer Price Index (PPI)
Lorenz curve
The process through which changes in monetary policy affect the overall level of economic activity
The process through which changes in fiscal policy affect the overall level of economic activity
The process through which changes in exchange rates affect the overall level of economic activity
The process through which changes in international trade affect the overall level of economic activity
All else equal
Let the buyer beware
Supply creates its own demand
The invisible hand
Used together to satisfy a particular want or need
Used interchangeably to satisfy a particular want or need
Unrelated to each other in satisfying wants or needs
Completely unrelated in any way
Inflation and unemployment
Government spending and taxes
Savings and investment
Consumption and income
An extremely high and rapidly increasing inflation rate
A moderate and stable inflation rate
A period of deflation in the economy
A period of steady economic growth
The ability of one country to produce a good or service at a lower opportunity cost than another country
The ability of one country to produce a good or service with fewer resources than another country
The ability of one country to produce a good or service at a higher opportunity cost than another country
The ability of one country to produce all goods and services more efficiently than another country
Prices that do not change quickly in response to changes in supply and demand
Prices that are set by the government and cannot be changed by firms
Prices that are adjusted continuously in response to changes in the economy
Prices that are set by monopolies to maximize profit
The ratio of the change in the money supply to the change in the monetary base
The ratio of government spending to the level of GDP
The ratio of taxes to disposable income
The ratio of investment to savings in an economy
The Federal Reserve
Commercial banks
The Treasury Department
The President of the United States
Full employment
Below full employment
A recessionary gap
An inflationary gap
Used together in the production process
Used interchangeably in the production process
Completely unrelated in the production process
Unrelated to the production process
Interest rates are so high that people prefer to hold cash rather than invest or spend
Interest rates are so low that people prefer to hold cash rather than invest or spend
Inflation is high, leading to a decrease in the purchasing power of money
The central bank loses control over the money supply
Sales tax
Progressive income tax
Property tax
Corporate income tax
Exports exceed imports
Imports exceed exports
Both exports and imports are equal
Both exports and imports are zero
The ease with which an asset can be converted into cash without loss of value
The total amount of money in circulation in an economy
The total amount of money held by households and businesses
The total amount of money held by banks as reserves
The total amount of money in an economy
The total value of physical and human capital in an economy
The total amount of money held by households
The total amount of money held by businesses
Inflation and unemployment
Government spending and taxes
Savings and investment
Consumption and income
Profits earned from selling an asset, like a stock or real estate, at a higher price than it was purchased
Profits earned from producing and selling goods and services
Wages earned from labor
Interest earned from savings accounts
An increase in production costs that leads to higher prices
An increase in consumer demand for goods and services
An increase in government spending on infrastructure projects
An increase in the money supply by the central bank
Tax rates and tax revenue
Government spending and economic growth
Inflation and unemployment
Interest rates and investment
The quantity supplied is equal to the quantity demanded in a market
The quantity supplied exceeds the quantity demanded in a market
The quantity demanded exceeds the quantity supplied in a market
The price level is constant in a market
A record of all economic transactions between residents of a country and the rest of the world in a given period
The difference between government revenues and expenditures in a given period
The difference between exports and imports of goods and services in a given period
The total amount of money in circulation in a country
The difference between a country's exports and imports of goods and services
The difference between government revenues and expenditures
The difference between a country's savings and investments
The difference between the government budget deficit and surplus
The change in consumption resulting from a change in disposable income
The total amount of consumption in an economy
The change in investment resulting from a change in interest rates
The change in saving resulting from a change in disposable income
The buying and selling of government securities by the central bank to influence the money supply
The buying and selling of goods and services in international markets
The buying and selling of stocks in the stock market
The buying and selling of consumer goods in a free market economy
The limit on the total amount of money a consumer can spend
The limit on the total amount of money a government can borrow
The limit on the total amount of money a firm can invest
The limit on the total amount of money a central bank can print