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.

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The creativity and innovation an individual business owner puts towards the production of goods and services.

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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.

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The total market value of all final goods and services produced during a given time period within a country’s borders. Equal to the total income of the nation’s households or the total expenditures on the nation’s output.

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Caused by changes in the structure of demand for goods and in technology; workers who are unemployed because their skills do not match what is in demand by producers in the economy.

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When workers are voluntarily moving between jobs, or when recent college graduates are looking for their first job. Considered part of the natural rate of unemployment.

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An increase in the output of goods and services in a nation between two periods of time.

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A macroeconomic term referring to the sum of the economic activity undertaken by a nation’s households and firms in the product and resource market in a year. The circular flow model offers a graphical representation, showing the flow of money and resources in a nation. The aggregate demand / aggregate supply model is another graphical representation, showing the average price level, the level of output and the level of total demand and supply for a nation’s output.

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(In microeconomics): The period of time over which the amount of land and capital employed in the production of a good is fixed in quantity. “The fixed-plant period”. Labor and raw materials are the only variable resources in the short run. (In macroeconomics): The period of time over which wages and prices are relatively inflexible. A fall in aggregate demand will lead to unemployment and recession in the short-run. Due to the inability of the nation’s producers to reduce wages paid to worker, they must lay workers off to reduce costs as demand falls.

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Market economic system: A system of resource allocation in which buyers and sellers meet in markets to determine the price and quantity of goods, services and productive resources.

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The proportion of any change in income spent on domestically produced goods and services; equal to the change in consumption divided by the change in disposable income. One divided by 1-MPC determines the size of the Keynesian spending multiplier.

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