47 terms

economics 14 and gdp

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business cycles
largely systematic ups and downs of real gdp
business fluctuations
rise and fall of real gdp over time in a nonsystematic manner
recession, expansion
two phases of business cycle
peak
point where real gdp stops going up
trough
turnaround point where real gdp stops going down
recession
period during which real gdp declines for two quarters in a row, or six consecutive months
expansion
period of recovery from a recession
trend line
if periods of recession and expansion did not occur, the economy would follow a steady growth path called a ___
depression
state of the economy with large numbers of people out of work, acute shortages, and excess capacity in manufacturing plants
depression scrip
money printed by towns, counties, and other civic bodies during a depression
econometric model
macroeconomic model that uses algebraic equations to describe how the economy behaves
index of leading indicators
monthly statistical series that usually turns down before real gdp turns down and turns up before real gdp turns up
unemployed
people available for work who made a specific effort to find a job during the past month
unemployment rate
unemployed/civilian labor force
frictional, structural, cyclical, seasonal, technological
types of unemployment
frictional unemployment
unemployment caused by workers who are between jobs for one reason or another
structural unemployment
unemployment that occurs when a fundamental change in the operations of the economy reduces the demand for workers and their skills
cyclical unemployment
unemployment directly related to swings in the business cycle
seasonal unemployment
unemployment resulting from changes in the weather or changes in the demand for certain products
technological unemployment
unemployment caused when workers with less skills, talent, or education are replaced by machines and othe requipment that do their jobs
kinds
gdo does not consider the ___ of items produced
per person
gdp does not meausre amount produced ___
distributed
gdp does not measure how goods are ___
price levels
gdp does not allow for changing ___
unpaid household
gdp does not include ___ work
barter
gdp does not include ___ trade
quality
gdp does not measure ___ of items
leisure time
gdp does not recognize value of ___
price level
relative magnitude of prices at one point in time
market basket
to measure price level, economists select a ___ of goods
consumer price index
index used to measure inflation
deflation
decrease in general price level
creeping inflation
inflation in the range of 1-3% per year
galloping inflation
intense inflation up to 100-300%
hyperinflation
inflation in the range of 500%
demand-pull theory
all sectors in the economy try to buy more goods and services than the economy can produce, so prices are pulled up by excessive demand
excessive demand, excessive monetary growth, government deficit spending, rising input costs, rising nonlabor input costs
causes of inflation
spending habits
inflation can cause people to change their ___
lorenz curve
curve that shows how much the actual distribution of income varies from an equal distribution
ability, discrimination, education, monopoly power, wealth
reasons for income inequality
poverty guidelines
annual dollar amounts used to evaluate the money income that families and unrelated individuals receive
welfare
economic and social programs that provide regular assistance from the government or private agencies because of need
food stamps
government-issued coupons that can be redeemed for food
earned income tax credit
provides federal tax credits and sometimes cash to low-income workers
enterprise zones
areas where companies can locate free of some local, state, and federal tax laws and restrictions
workfare
program that requires welfare recipients to exchange some of their labor for benefits
negative income tax
proposed type of tax that would make cash payments to certain groups below the poverty line