chapter 17
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abbydeemer on May 21, 2012
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28 terms
Terms | Definitions |
|---|---|
 inflation | a sustained rise in the general price level of goods and services |
| recession | two or more successive quarters in which the economy shrinks instead of grows |
| unemployment | the inability of those who are in the labor force to find a job; defined as the total number of those in the labor force actively looking for a job but unable to find one |
| full employment | an arbitrary level of unemployment that corresponds to "normal" friction in the labor market |
| consumer price index (CPI) | a measure of the change in price over time of a specific group of goods and services used by the average household |
| fiscal policy | the federal government's use of taxation and spending policies to afect overall business activity |
| keynesian economics | a school of economic thought that tends to favor active federal government policy making to stabilize economy-wide fluctuations, usually by implementing descretionary fiscal policy |
| budget deficit | government expenditures that exceed receipts |
| wage and price controls | government-imposed controls on the maximum prices that may be charged for specific goods and services, plus controls on permissible wage increases |
| automatic, or built-in, stabilizers | certain federal programs that cause changes in national income during economic fluctuations without the action of Congress and the president |
| U.S treasury bond | debt issued by the federal government |
| gross public debt | the net public debt plus interagency borrowings within the government |
| net public debt | the accumulation of all past federal government deficits; the total amount owed by the federal government to individuals, businesses, and foreigners |
| gross domestic product (GDP) | the dollar value of all final goods and services produced in a one-year period |
| federal reserve sythem(the Fed) | the agency created by Congress in 1913 to serve as the nation's central banking organization |
| federal open market comittee | the most important body within the federal reserve system. the federal open market committee decides how monetary policy should be carried out |
| monetary policy | the utilization of changes in the amount of money in circulation to alter credit markets, employment, and the rate of inflation |
| loose monetary policy | monetary policy that makes credit inexpensive and abundant, possile leading to inflation |
| tight monetary policy | monetary policy that makes credit expensive in an effort to slow the economy |
| imports | goods and services produced outside a country but sold within its borders |
| exports | goods and services products domestically for sale abroad |
| import quota | a restriction imposed on the value or number of units or a particular good that can be brought into a country |
| tariffs | taxes on imports |
| balance of trade | the difference between the value of a nation's exports of goods and the value of its imports of goods |
| current account balance | the current account balance includes the balance of trade in services, unilateral transfers, and other items |
| loophole | a legal method by which individuals and businesses are allowed to reduce the tax liabilities owed to the government |
| progressive tax | a tax that rises in percentage terms as incomes rise |
| regressive tax | a tax that falls in percentage terms as incomes rise |
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