Macroeconomics Flashcards

Only 10 flashcards are shown at a time! Once you’ve mastered these 10 Economic terms, click the shuffle button below for 10 new terms. There are approximately 150 flashcards covering Macroeconomics.

Long-run Economic growth
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An increase in national output resulting from an increase in aggregate supply. If GDP rises because the nation’s resources became more productive or more abundant, then the full employment level of output will increase, indicating that such growth in sustainable, and most likely characterized by low inflation (i.e. stable price levels).

Long-run Economic growth
Under-employment
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When a worker is employed in a part-time job but wishes to be working full time. Or when a worker is employed in a job for which he is vastly over-qualified.

Under-employment
Macroeconomics
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The study of entire nations’ economies and the interactions between households, firms, government and foreigners.

Macroeconomics
Human capital
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The value of labor created through education, training, knowledge and health. An important determinant of aggregate supply and the level of economic growth in a nation.

Human capital
Aggregate Demand
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A schedule or curve which shows the total demand for the goods and services of a nation at a range of price levels and at a given period of time.

Aggregate Demand
Loanable funds market
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The market in which the demand for private investment and the supply of household savings intersect to determine the equilibrium real interest rate. Can be used to illustrate the crowding-out effect of deficit-financed fiscal policy, which causes the supply of funds to become more scarce as households save more money in government bonds.

Loanable funds market
Consumer Price Index (CPI)
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An index which measures the price of a fixed market basked of consumer goods bought by a typical consumer. Used to calculate the inflation rate in a nation.

Consumer Price Index (CPI)
Wage
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The payment to labor in the resource market. Wages are the “price of labor”

Wage
Monetary policy
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The central bank’s manipulation of the supply of money aimed at raising or lowering interest rates to stimulate or contract the level of aggregate demand to promote the macroeconomic objectives of price level stability and full employment.

Monetary policy
Natural rate of unemployment
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The level of unemployment that prevails in an economy that is producing at its full employment level of output. Includes structural and frictional unemployment.

Natural rate of unemployment

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