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Terms in this set (35)
A severe recession
The reference year with which prices in other years are compared in a price index
A phase in the business cycle, following a recession, in which real GDP increases and unemployment declines
A phase in the business cycle in which the decline in real GDP lasts for at least six months with high unemployment
The total quantity of goods and services demanded by households, firms, foreigners, and government at varying price levels
The bottom of a business cycle
Alternating periods of growth and decline in an economy's GDP
A phase in the business cycle in which real GDP declines, inflation moderates, and unemployment emerges
A phase in the business cycle marked by a relatively high level of real GDP, full employment, and inflation
GDP measured in terms of current market prices, unadjusted for inflation
GDP adjusted for changes in the price level
Inflation caused primarily by an increase in aggregate demand
Inflation caused primarily by a decrease in aggregate supply
Total value of all final goods and services, measured in current market prices, produced in the economy during a year
Gross Domestic Product
A measure comparing the prices of all goods and services produced in the economy during a given year to the prices of those goods and services purchased in a base year
An increase in the price level
The top of the business cycle
The level of real GDP and the price level that equate the aggregate quantity demanded and the aggregate quantity supplied
A measure of prices in one year expressed in relation to prices in a base year
Economic system based on supply and demand without government control
In a Market Economy, who owns the Factors of Production?
Key advantages of free market economic systems include
Economic efficiency, economic freedom, economic growth, and variety of goods
Which of the following would cause a change in the quantity demanded for a product?
Decreasing the price of the product
The law of demand states
More will be purchased at low prices than at high ones
According to the law of supply
The higher the price the larger the quantity produced
A subsidy is
A government payment to support a business or market
For most goods, a rise in people's income means that there will be
An increase in demand
In the Circular Flow Model, who owns the Factors of Production?
What best illustrates an improvement in a country's standard of living?
An increase in real per capita gross domestic product
Hyperinflation is typically caused by
Continuous expansion of the money supply to finance government budget deficits
What changes in the supply of and the demand for a good will definitely result in a decrease in both the equilibrium price and quantity of the good?
Decrease in demand
Which of the following individuals is considered officially unemployed?
Pat, who recently left a job to look for a different job in another town
Which of the following statements is true of unanticipated inflation?
It increases the economic well-being of net debtors
An increase in which of the following would LEAST likely increase labor productivity?
The labor force
Which of the following is a basic tenet of classical economic analysis?
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