Create an account
gross domestic product
the measure of the economy's total production of goods and services (market value of g/s produced over a period of time)
ratio of the number of people classified as unemployed to the total labor force; measured extent to which economy is operating at full capacity
beliefs influence how much consumption and investment will be pursued and affect aggregate demand for g/s
factors that determine level of interest rates
supply of funds from savers, demands for funds from business, government's net supply and/or demand for funds, expected rate of inflation
positive demand shocks
reductions in tax rates, increases in money supply, increases in gov't spending, increases in foreign export demand
the use of government spending and taxing for the specific purpose of stabilizing the economy
actions taken by the Board of Governors of the Federal Reserve System to influence the money supply or interest rates
the fraction of deposits that banks must hold as cash on hand or as deposits with the Fed; tool of monetary policy
federal funds rate
interest rate at which banks make short-term, usually overnight, loans to each other; tool of monetary polciy
supply side policies
treat the issues of the productive capacity of the economy, goal is to create env in which wokers and owners of capital have max incentive and ability to produce/develop goods, focus on incentives and marginal tax rates
leading economic indicators
economic series that tend to rise or fall in advance of the rest of the economy
classification of firms into industry groups using numerical codes to identify industries
investment strategy that entails shifting the portfolio into industry sectors that are expected to outperform others based on macroeconomic forecasts
start up stage
rapid and increasing sales growth; new tech or product; difficult to predict which firms will be industry leaders
stable sales growth, industry leaders emerge, performance of firms will closely track performance of overall industry
product has reached its potential for use by consumers; slowing sales growth; cash cows
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