22 terms

ECON 104 FINAL terms (exam 1)

Command System
government ownership, decisions made by a central planning board.
Market system
private ownership of resources, decisions based on market.
Gross Domestic Product
GDP stands for
Gross Domestic Product
total market value of final goods and services produced in a given period of time.
Retained Earnings
When corporate retains profit to use in future.
Personal disposable income (PDI)
after-tax income
Nominal GDP
current prices; no adjustment for inflation
Real GDP
GDP in constant prices, or price at base year
Real GDP decreases from one year to the next.
financial shock, political event/world event, or reduction in spending
Causes of recession
increase in greneral (average) level of prices
demand-pull inflation and cost-push inflation
the 2 causes of inflation
Demand-pull inflation
type of inflation where there is too much spending chasing too few good. happens if economy is strong.
cost-push inflation
type of inflation where the cost of production goes up and pushes all other prices up.
those over the age of 65 and under the age of 16, those in the military, those in jail, full time students, and home-makers.
labor force excludes...
frictional, structural, and cyclical
the 3 types of unemployment are...
frictional unemployment
voluntarily unemployeed, or inbetween jobs.
structural unemployment
not voluntary unemployment. Do not have skills necessary for unemployment. Lorg-term.
Cyclical unemployment
unemployed because the economy is weak.
an economic system
a set of arrangements and a coordinating mechanism.
the natural rate of unemployment
the rate of unemployment occurring when the economy is in short-run potential.
Real GDP
find the strength or weakness of an economy by looking at...