Economic Terms: Income, Transfers, Savings, Markets, and More, Quizzes of Introduction to Macroeconomics

Download Economic Terms: Income, Transfers, Savings, Markets, and More and more Quizzes Introduction to Macroeconomics in PDF only on Docsity! TERM 1 disposable income DEFINITION 1 equal to income tax plus govt. transfers, minus taxes. It is the total amount of household income available for either consumption or for private savings. TERM 2 government transfers DEFINITION 2 payments by the government to individuals for which no good or service is provided in return TERM 3 private savings DEFINITION 3 equal to disposable income minus consumer spending, is disposable income that is not spent on consumption TERM 4 financial markets DEFINITION 4 banking, stock and bond markets where govt lending and private savings are channeled into government borrowing, investment spending and foreign borrowing. TERM 5 govt. purchases of goods and services DEFINITION 5 total purchases by federal, state, and local governments, include everything from military spending on ammunition to your local public school's spending on chalk, erases and teachers salaries. TERM 6 foreign lending DEFINITION 6 lending by foreigners to borrowers in the United States and purchases by foreigners of shares in stock in American companies TERM 7 foreign borrowing DEFINITION 7 borrowing by foreigners from U.S. lenders and purchases by Americans of stock in foreign company TERM 8 inventories DEFINITION 8 stocks of goods and raw materials that firms hold to facilitate their operations TERM 9 investment spending DEFINITION 9 The spending on productive physical capital, such as machinery and construction of buildings, and on changes to inventories, as part of total spending on goods and services TERM 10 aggregate spending DEFINITION 10 sum of consumer spending, investment spending, govt purchases of goods and services, and exports - importsGDP=C+I+G+X-IM TERM 21 price index DEFINITION 21 normalize measure of the overall price level. It is always cited along with the year for which the aggregate price level is being measured and the base year TERM 22 consumer price index DEFINITION 22 measures the cost of the market basket of a typical urban American family. Most widely used measure of the aggregate price level. the overall price level of final consumer goods and services across the economy TERM 23 inflation rate DEFINITION 23 price indexes are also the basis for measuring inflation. The annual percent change in an official price index TERM 24 Producer price index DEFINITION 24 measures the cost of a typical basket of goods and services purchased by producers TERM 25 GDP deflator DEFINITION 25 another widely used price measure. It is the equal to 100x ratio of nominal gap for that year to real GDP TERM 26 discouraged workers DEFINITION 26 nonworking people who are capable of working but have given up looking for a job given the state of the job market TERM 27 marginally attached workers DEFINITION 27 would like to be employed and have looked for a job in the recent past but are not currently looking for work TERM 28 underemployment DEFINITION 28 number of people who work part time because they cannot find full time jobs TERM 29 jobless recovery DEFINITION 29 a period in which the real GDP growth rate is positive but the unemployment rate is still rising TERM 30 underemployment rate understates DEFINITION 30 unemployment rate does not include discouraged workers TERM 31 frictional unemployment DEFINITION 31 looking for employment, in a job search. Unemployment due to the time workers spend in job search. TERM 32 structural unemployment DEFINITION 32 unemployment that results when there are more people seeking jobs in a particular labor market than there are jobs available at the current wage rate. When the wage rate increases, employers demand less labor. This unemployment occurs when the wage rate is above WE. TERM 33 Things that cause structural unemployment DEFINITION 33 efficiency wageslabor unionsgovt policiesmismatches b/w employees and employers TERM 34 Changes in natural rate of unemployment DEFINITION 34 changes in labor market characteristicsgovt policieslabor market institutions (labor unions) TERM 35 natural unemployment DEFINITION 35 structural unemployment + frictional unemployment TERM 46 rule of 70 DEFINITION 46 mathematical formula that tells us how long it takes real gap per capita , or any other variable that grows gradually over time, to double= 70/annual growth rate of variable TERM 47 labor productivity DEFINITION 47 used to refer either to output per worker, or in some cases, to output per hour TERM 48 aggregate production function DEFINITION 48 hypothetical function that shows how productivity (real GDP per worker) depends on the quantities of physical capital per worker and human capital per worker as well as the state of technology TERM 49 diminishing returns to physical capital DEFINITION 49 each successive increase in the amount of physical capital per worker leads to a smaller increase in productivity TERM 50 total factor productivity DEFINITION 50 the amount of output that can be achieved with a given number of factor inputs TERM 51 growth accounting DEFINITION 51 to disentangle the effects of physical, human and technological factors. it estimates the contribution of each major factor in the aggregate production function to economic growth TERM 52 convergence hypothesis DEFINITION 52 international differences in real GDP per capita tend to narrow over time TERM 53 research and development DEFINITION 53 technological process is a result of this TERM 54 price index DEFINITION 54 cost of market basket/cost of market basket in base year x100 TERM 55 inflation rate DEFINITION 55 price index in year 2-price index in year 1/price index in year 1 x100 TERM 56 job force participation rate DEFINITION 56 labor force/age 16 or older x100 TERM 57 unemployment rate DEFINITION 57 unemployed/labor force x100