Terms in this set (34)
increase in the Real GDP in a time period, Increase in the Real GDP per capita over a period of time.
wealth in the form of money or property owned by a person or business and human resources of economic value
the skills and knowledge gained by a worker through education and experience
individuals who start new businesses, introduce new products, and improve management techniques
a level of production in which the marginal product of labor decreases as the number of workers increases
average labor productivity
total output divided by the quantity of labor employed in its production
Current Income minus spending on current needs
the total savings in an economy from households, business, and the government
y=C+I+G+MX main formula,
Total savings from households + Businesses after taxes
Sp = Y - T - C.
total savings of government: Taxes minus government spending
the proportion of disposable income that is saved
young people borrow, middle agers pay off debts and save, and older people draw down their savings; on average, net savings over a lifetime is usually little or nothing
ex. Retirement, to buy a house
Saving for protection against unexpected setbacks, such as the loss of a job or a medical emergency.
ex. Saving during good times, Insurance
A financial statement that summarizes a company's assets, liabilities and shareholders' equity at a specific point in time.
the value one owns
the debt one owes
financial institutions through which savers can indirectly provide funds to borrowers
Federal Reserve System
the central bank of the United States
shares of ownership in a company
a certificate issued by a government or private company which promises to pay back with interest the money borrowed from the buyer of the certificate: The city issued bonds to raise money for putting in new sewers.
a part of a company's profit that is divided among the people with shares in the company
regualer interest payments made to the bondholder
THe interest rate that a bond issuer will pay to a bondholder
the act of introducing variety (especially in investments or in the variety of goods and services offered)
This refers to the fraction of deposits banks hold in reserves
Money Supply, M1
Currency + Checkable deposits
Money Supply, M2
M1 + Savings deposits, including MMDA's + Small time deposits (>100,000) +MMMF held by individuals
the buying and selling of government securities to alter the supply of money
the equation m x v = p x y, which relates the quantity of money, the velocity of money, and the dollar value of the economy's output of goods and services
National Savings Formula
investments =national savings
public savings formula
Private Savings Formula
T=G is balanced
T-G<0 deficient budget
T-G>0 Budget Surplus
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