Economics 09202008

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REWARDS FOR ENGAGING IN A PARTICULAR ACTIVITY: INCENTIVES
THE STUDY OF HOW PEOPLE ALLOCATE THEIR LIMITED RESOURCES TO SATISFY THEIR UNLIMITED WANTS.: ECONOMICS
THINGS USED TO PRODUCE OTHER THINGS TO SATISFY PEOPLE'S WANTS.: RESOURCES
WHAT PEOPLE WOULD BUY IF THEIR INCOMES WERE UNLIMITED.: WANTS
THE STUDY OF DECISION MAKING UNDERTAKEN BY INDIVIDUALS (OR HOUSEHOLDS) AND BY FIMRS.: MICROECONOMICS
THE STUDY OF THE BEHAVIOR OF THE ECONOMY AS A WHOLE, INCLUDING SUCH ECONOMYWIDE PHENOMENA AS CHANGES IN UNEMPLOYMNENT, THE GENERAL PRICE LEVEL, AND NATIONAL INCOME.: MACROECONOMICS
TOTAL AMOUNTS OR QUANTITIES; AGGREGATE DEMAND, FOR EXAMPLE, IS TOTAL PLANNED EXPENDITURES THROUGHOUT A NATION.: AGGREGATES
THE ASSUMPTION THAT PEOPLE DO NOT INTENTIONALLY MAKE DECISIONS THAT WOULD LEAVE THEM WORSE OFF.: RATIONALITY ASSUMPTION
SIMPLIFIED REPRESENTATIONS OF THE REAL WORLD USED AS THE BASIS FOR PREDICTIONS OR EXPLANATIONS.: MODELS OR THEORIES
THE ASSUMPTION THAT NOTHING CHANGES EXCEPT THE FACTOR OR FACTORS BEING STUDIED.: CETERIS PARIBUS ASSUMPTION
RELYING ON REAL-WORLD DATA EVALUATING THE USEFULNESS OF A MODEL.: EMPIRICAL
AN APPROACH TO STUDY OF CONSUMER BEHAVIOR THAT EMPHASIZES PSYCHOLOGICAL LIMITATIONS AND COMPLICATIONS THAT POTENTIALLY INTERFERE WITH RATIONAL DECISION MAKING.: BEHAVIORAL ECONOMICS
THE HYPOTHESIS THAT PEOPLE ARE NEARLY, BUT NOT FULLY, RATIONAL, SO THAT THEY CANNOT EXAMINE EVERY POSSIBLE CHOICE AVAILABLE TO THEM BUT INSTEAD USE SIMPLE RULES OF THUMB TO SORT AMONG THE ALTERNATIVES THAT HAPPEN TO OCCUR TO THEM.: BOUNDED RATIONALITY
ANALYSIS THAT IS STRICTLY LIMITED TO MAKING EITHER PURELY DESCRIPTIVE STATEMENTS OR SCIENTIFIC PREDICITONS; FOR EXAMPLE, "IF A, THEN B". A STATEMENT OF WHAT IS.: POSITIVE ECONOMICS
ANALYSIS INVOLVING VALUE JUDGMENTS ABOUT ECONOMIC POLICIES; RELATES TO WHETHER THINGS ARE GOOD OR BAD. A STATEMENT OF WHAT OUGHT TO BE.: NORMATIVE ECONOMICS
A VARIABLE WHOSE VALUE IS DETERMINED INDEPENDENTLY OF, OR OUTSIDE, THE EQUATION UNDER STUDY.: INDEPENDENT VARIABLE
A VARIABLE WHOSE VALUE CHANGES ACCORDING TO CHANGES IN THE VALUE OF ONE OR MORE INDEPENDENT VARIABLES.: DEPENDENT VARIABLE
A RELATIONSHIP BETWEEN TWO VARIABLES THAT IS POSITIVE, MEANING THAT AN INCREASE IN ONE VARIABLE IS ASSOCIATED WITH AN INCREASE IN THE OTHER AND A DECREASE IN ONE VARIABLE IS ASSOCIATED WITH A DECREASE IN THE OTHER.: DIRECT RELATIONSHIP
A RELATIONSHIP BETWEEN TWO VARIABLES THAT IS NEGATIVE, MEANING THAT AN INCREASE IN ONE VARIABLE IS ASSOCIATED WITH A DECREASE IN THE OTHER AND A DECREASE IN ONE VARIABLE IS ASSOCIATED WITH AN INCREASE IN THE OTHER.: INVERSE RELATIONSHIP
A LINE THAT CAN BE DIVIDED INTO SEGMENTS OF EQUAL LENGTH, EACH ASSOCIATED WITH A NUMBER.: NUMBER LINE
THE VERTICAL AXIS IN A GRAPH.: Y AXIS
THE HORIZONTAL AXIS IN A GRAPH.: X AXIS
THE INTERSECION OF THE Y AXIS AND THE X AXIS IN A GRAPH.: ORIGIN
THE CHANGES IN THE Y VALUE DIVIDED BY THE CORRESPONDING CHANGE IN THE X VALUE OF A CURVE; THE "INCLINE" OF THE CURVE.: SLOPE
A SITUATION IN WHICH THE INGREDIENTS FOR PRODUCING THE THINGS PEOPLE DESIRE ARE INSUFFICIENT TO SATISFY ALL WANTS. IT IS NOT A SHORTAGE. IT IS NOT POVERTY.: SCARCITY
ANY ACTIVITY THAT RESULTS IN THE CONVERSION OF RESOURCES INTO PRODUCTS THAT CAN BE USED IN CONSUMPTION.: PRODUCTION
THE NATURAL RESOURCES THAT ARE AVAILABLE FROM NATURE. LAND AS A RESOURCE INCLUDES LOCATION, ORIGINAL FERTILITY AND MINERAL DEPOSITS, TOPOGRAPHY, CLIMATE, WATER, AND VEGETATION.: LAND
PRODUCTIVE CONTRIBUTIONS OF HUMANS WHO WORK, INVOLVING BOTH MENTAL AND PHYSICAL ACTIVITIES.: LABOR
ALL MANUFACTURED RESOURCES, INCLUDING BUILDINGS, EQUIPMENT, MACHINES, AND IMPROVEMENTS TO LAND THAT ARE USED FOR PRODUCTION.: PHYSICAL CAPITAL
THE ACCUMULATED TRAINING AND EDUCATION OF WORKERS.: HUMAN CAPITAL
THE COMPONENT OF HUMAN RESOURCES THAT PERFORMS THE FUNCTIONS OF RAISING CAPITAL, ORGANIZING, MANAGING, AND ASSEMBLING OTHER FACTORS OF PRODUCTION, MAKING BASIC BUSINESS POLICY DECISIONS, AND TAKING RISKS.: ENTREPRENEURSHIP
1. LAND 2. LABOR 3. PHYSICAL CAPITAL 4. HUMAN CAPITAL 5. ENTREPRENEURSHIP: 5 FACTORS OF PRODUCTION, OR "RESOURCES"
ALL THINGS FROM WHICH INDIVIDUALS DERIVE SATISFACTION OR HAPPINESS.: GOODS
GOODS THAT ARE SCARCE, FOR WHICH THE QUANTITY DEMANDED EXCEEDS THE QUANTITY SUPPLIED AT A ZERO PRICE.: ECONOMIC GOODS
MENTAL OR PHYSICAL LABOR OR HELP PURCHASED BY CONSUMERS. EXAMPLES ARE THE ASSISTANCE OF PHYSICIANS, LAWYERS, DENTISTS, REPAIR PERSONNEL, HOUSECLEANERS, EDUCATORS, RETAILERS, AND WHOLESALERS; ITEMS PURCHASED OR USED BY CONSUMERS THAT DO NOT HAVE PHYSICAL: SERVICES
THE HIGHEST-VALUED, NEXT-BEST ALTERNATIVE THAT MUST BE SACRIFICED TO OBTAIN SOMEHTING OR TO SATISFY A WANT. WHEN ONE CHOICE IS MADE ANOTHER MUST BE GIVEN UP. IT IS ALWAYS A FORGONE OPPORTUNITY.: OPPORTUNITY COST
A CURVE REPRESENTING ALL POSSIBLE COMBINATIONS OF MAXIMUM OUTPUTS THAT COULD BE PRODUCED ASSUMING A FIXED AMOUNT OF PRODUCTIVE RESOURCES OF A GIVEN QUALITY. IT ASSUMES EFFICIENT USE OF THOSE RESOURCES FOR A SPECIFIED TIME PERIOD.: PRODUCTION POSSIBILITIES CURVE (PPC)
SOCIETY'S POOL OF APPLIED KNOWLEDGE CONCERNING HOW GOODS AND SERVICES CAN BE PRODUCED.: TECHNOLOGY
THE CASE IN WHICH A GIVEN LEVEL OF INPUTS IS USED TO PRODUCE THE MAXIMUM OUTPUT POSSIBLE. ALTERNATIVELY, THE SITUATION IN WHICH A GIVEN OUTPUT IS PRODUCED AT MINIMUM COST.: EFFICIENCY
ANY POINT BELOW THE PRODUCTION POSSIBILITIES CURVE AT WHICH THE USE OF RESOURCES IS NOT GENERATING THE MAXIMUM POSSIBLE OUTPUT.: INEFFICIENT POINT
THE FACT THAT THE OPPORTUNITY COST OF ADDITIONAL UNITS OF A GOOD GENERALLY INCREASES AS SOCIETY ATTEMPTS TO PRODUCE MORE OF THAT GOOD. THIS ACCOUNTS FOR THE BOWED-OUT SHAPE OF THE PRODUCTION POSSIBILITIES CURVE.: LAW OF INCREASING RELATIVE COST
THE USE OF GOODS AND SERVICES FOR PERSONAL SATISFACTION.: CONSUMPTION
THE ORGANIZATION OF ECONOMIC ACTIVITY SO THAT WHAT EACH PERSON (OR REGION) CONSUMES IS NOT IDENTICAL TO WHAT THAT PERSON (OR REGION) PRODUCES. AN INDIVIDUAL MAY SPECIALIZE, FOR EXAMPLE, IN LAW OR MEDICINE. A NATION MAY SPECIALIZE IN THE PRODUCTION OF CO: SPECIALIZATION
THE ABILITY TO PRODUCE A GOOD OR SERVICE AT A LOWER OPPORTUNITY COST COMPARED TO OTHER PRODUCTS.: COMPARATIVE ADVANTAGE
THE ABILITY TO PRODUCE MORE UNITS OF A GOOD OR SERVICE USING A GIVEN QUANTITY OF LABOR OR RESOURCE INPUTS. EQUIVALENTLY, THE ABILITY TO PRODUCE THE SAME QUANTITY OF A GOOD OR SERVICE USING FEWER UNITS OF LABOR OR RESOURCE INPUTS. FOR EXAMPLE, MORE TRUCK: ABSOLUTE ADVANTAGE
THE SEGREGATION OF A RESOURCE INTO DIFFERENT SPECIFIC TASKS; FOR EXAMPLE, ONE AUTOMOBILE WORKER PUTS ON BUMPERS, ANOTHER DOORS, AND SO ON.: DIVISION OF LABOR
ALL OF THE ARRANGEMENTS THAT INDIVIDUALS HAVE FOR EXCHANGING WITH ONE ANOTHER. THUS, FOR EXAMPLE, WE CAN SPEAK OF THE LABOR MARKET, THE AUTOMOBILE MARKET, AND THE CREDIT MARKET.: MARKET
A SCHEDULE SHOWING HOW MUCH OF A GOOD OR SERVICE PEOPLE WILL PURCHASE AT ANY PRICE DURING A SPECIFIED TIME PERIOD, OTHER THINGS BEING CONSTANT.: DEMAND
THE OBSERVATION THAT THERE IS A NEGATIVE, OR INVERSE RELATIONSHIP BETWEEN THE PRICE OR ANY GOOD OR SERVICE AND THE QUANTITY DEMANDED, HOLDING OTHER FACTORS CONSTANT.: LAW OF DEMAND
THE PRICE THAT WE OBSERVE TODAY, EXPRESSED IN TODAY'S DOLLARS; ALSO CALLED THE ABSOLUTE OR NOMINAL PRICE.: MONEY PRICE
A GRAPHICAL REPRESENTATION OF THE DEMAND SCHEDULE; A NEGATIVELY SLOPED LINE SHOWING THE INVERSE RELATIONSHIP BETWEEN THE PRICE AND THE QUANTITY DEMANDED (OTHER THINGS BEING EQUAL).: DEMAND CURVE
THE DEMAND OF ALL CONSUMERS IN THE MARKETPLACE FOR A PARTICULAR GOOD OR SERVICE. THE SUMMATION AT EACH PRICE OF THE QUANTITY DEMANDED BY EACH INDIVIDUAL.: MARKET DEMAND
DETERMINANTS OF THE RELATIONSHIP BETWEEN PRICE AND QUANTITY THAT ARE UNCHANGED ALONG A CURVE; CHANGES IN THESE FACTORS CAUSE THE CURVE TO SHIFT.: CETERIS PARIBUS CONDITIONS
GOODS FOR WHICH DEMAND RISES AS INCOME RISES. MOST GOODS ARE NORMAL GOODS.: NORMAL GOODS
GOODS FOR WHICH DEMAND FALLS AS INCOME RISES.: INFERIOR GOODS
TWO GOODS ARE SUBSTITUTES WHEN A CHANGE IN THE PRICE OF ONE CAUSES A SHIFT IN DEMAND FOR THE OTHER IN THE SAME DIRECTION AS THE PRICE CHANGES.: SUBSTITUTES
TWO GOODS ARE COMPLEMENTS WHEN A CHANGE IN THE PRICE OF ONE CAUSES AN OPPOSITE SHIFT IN THE DEMAND FOR THE OTHER.: COMPLEMENTS
A SCHEDULE SHOWING THE RELATIONSHIP BETWEEN PRICE AND QUANTITY SUPPLIED FOR A SPECIFIED PERIOD OF TIME, OTHER THINGS BEING EQUAL.: SUPPLY
THE OBSERVATION THAT THE HIGHER THE PRICE OF A GOOD, THE MORE OF THAT GOOD SELLERS WILL MAKE AVAILABLE OVER A SPECIFIED TIME PERIOD, OTHER THINGS BEING EQUAL.: LAW OF SUPPLY
THE GRAPHICAL REPRESENTATION OF THE SUPPLY SCHEDULE; A LINE (CURVE) SHOWING THE SUPPLY SCHEDULE, WHICH GENERALLY SLOPES UPWARD (HAS A POSITIVE SLOPE), OTHER THINGS BEING EQUAL.: SUPPLY CURVE
A NEGATIVE TAX; A PAYMENT TO A PRODUCER FROM THE GOVERNMENT, USUALLY IN THE FORM OF A CASH GRANT PER UNIT.: SUBSIDY
THE PRICE THAT CLEARS THAT MARKET, AT WHICH QUANTITY DEMANDED EQUALS QUANTITY SUPPLIED; THE PRICE WHERE THE DEMAND CURVE INTERSECTS THE SUPPLY CURVE.: MARKET CLEARING, OR EQUILIBRIUM, PRICE
THE SITUATION WHEN QUANTITY SUPPLIED EQUALS QUANTITY DEMANDED AT A PARTICULAR PRICE.: EQUILIBRIUM
A SITUATION IN WHICH QUANTITY DEMANDED IS GREATER THAT QUANTITY SUPPLIED AT A PRICE BELOW THE MARKET CLEARING PRICE.: SHORTAGE
A SITUATION IN WHICH QUANTITY SUPPLIED IS GREATER THAN QUANTITY DEMANDED AT A PRICE ABOVE THE MARKET CLEARING PRICE.: SURPLUS
AN ECONOMIC SYSTEM IN WHICH RELATIVE PRICES ARE CONSTANTLY CHANGING TO REFLECT CHANGES IN SUPPLY AND DEMAND FOR DIFFERENT COMMODITIES. THE PRICES OF THOSE COMMODITIES ARE SIGNALS TO EVERYONE WITHIN THE SYSTEM AS TO WHAT IS RELATIVELY SCARCE AND WHAT IS R: PRICE SYSTEM
AN ACT OF TRADING, DONE ON AN ELECTIVE BASIS, IN WHICH BOTH PARTIES TO THE TRADE ARE BETTER OFF AFTER THE EXCHANGE.: VOLUNTARY EXCHANGE
THE CONDITIONS UNDER WHICH TRADING TAKES PLACE. USUALLY, THE TERMS OF EXCHANGE ARE EQUAL TO THE PRICE AT WHICH A GOOD IS TRADED.: TERMS OF EXCHANGE
ALL OF THE COSTS ASSOCIATED WITH EXCHANGE, INCLUDING THE INFORMATIONAL COST OF FINDING OUT THE PRICE AND QUALITY, SERVICE RECORD, AND DURALBILITY OF A PRODUCT, PLUS THE COST OF CONTRACTING AND ENFORCING THAT CONTRACT.: TRANSACTION COSTS
GOVERNMENT-MANDATED MINIMUM OR MAXIMUM PRICES THAT MAY BE CHARGED FOR GOODS AND SERVICES.: PRICE CONTROLS
A LEGAL MAXIMUM PRICE THAT MAY BE CHARGED FOR A PARTICULAR GOOD OR SERVICE.: PRICE CEILING
A LEGAL MINIMUM PRICE BELOW WHICH A GOOD OR SERVICE MAY NOT BE SOLD. LEGAL MINIMUM WAGES ARE AN EXAMPLE.: PRICE FLOOR
ALL METHODS USED TO RATION SCARCE GOODS THAT ARE PRICE-CONTROLLED. WHENEVER THE PRICE SYSTEM IS NOT ALLOWED TO WORK, NONPRICE RATIONING DEVICES WILL EVOLVE TO RATION THE AFFECTED GOODS AND SERVICES.: NONPRICE RATIONING DEVICES
A MARKET IN WHICH GOODS ARE TRADED AT PRICES ABOVE THEIR LEGAL MAXIMUM PRICES OR IN WHICH ILLEGAL GOODS ARE SOLD.: BLACK MARKET
PRICE CEILING ON RENTS: RENT CONTROL
A WAGE FLOOR, LEGISLATED BY GOVERNMENT, SETTING THE LOWEST HOURLY RATE THAT FIRMS MAY LEGALLY PAY WORKERS. CURRENTLY $6.55/HR.: MINIMUM WAGE
A PHYSICAL SUPPLY RESTRICTION ON IMPORTS OF A PARTICULAR GOOD, SUCH AS SUGAR. FOREIGN EXPORTERS ARE UNABLE TO SELL IN THE UNITED STATES MORE THAN THE QUANTITY SPECIFIED IN THE IMPORT QUOTA.: IMPORT QUOTA
A SITUATION IN WHICH THE MARKET ECONOMY LEADS TO TOO FEW OR TOO MANY RESOURCES GOING TO A SPECIFIC ECONOMIC ACTIVITY.: MARKET FAILURE
A CONSEQUENCE OF AN ECONOMIC ACTIVITY THAT SPILLS OVER TO AFFECT THIRD PARTIES. POLLUTION IS AN EXTERNALITY.: EXTERNALITY
PARITES WHO ARE NOT DIRECTLY INVOLVED IN A GIVEN ACTIVITY OR TRANSACTION.: THIRD PARTIES
THE RIGHTS OF AN OWNER TO USE AND TO EXCHANGE PROPERTY.: PROPERTY RIGHTS
A CHARGE TO A POLLUTER THAT GIVES THE RIGHT TO DISCHARGE INTO THE AIR OR WATER A CERTAIN AMOUNT OF POLLUTION; ALSO CALLED A POLLUTION TAX.: EFFLUENT FEE
LAWS THAT RESTRICT THE FORMATION OF MONOPOLIES AND REGULATE CERTAIN ANTICOMPETITIVE BUSINESS PRACTICES.: ANTITRUST LEGISLATION
A FIRM THAT CAN DETERMINE THE MARKET PRICE OF A GOOD. IN THE EXTREME CASE, A MONOPOLY IS THE ONLY SELLER OF A GOOD OR SERVICE.: MONOPOLY
GOODS THAT CAN BE CONSUMED BY ONLY ONE INDIVIDUAL AT A TIME. PRIVATE GOODS ARE SUBJECT TO THE PRINCIPAL OF RIVAL CONSUMPTION.: PRIVATE GOODS
THE RECOGNITION THAT INDIVIDUALS ARE RIVALSIN CONSUMING PRIVATE GOODS BECAUSE ONE PERSON'S CONSUMPTION REDUCES THE AMOUNT AVAILABLE FOR OTHERS TO CONSUME.: PRINCIPLE OF RIVAL CONSUMPTION
GOODS FOR WHICH THE PRINCIPLE OF RIVAL CONSUMPTION DOES NOT APPLY, THEY CAN BE JOINTLY CONSUMED BY MANY INDIVIDUALS SIMULTANEOUSLY AT NO ADDITIONAL COST AND WITH NO REDUCTION IN QUALITY OR QUANTITY. ALSO NO ONE WHO FAILS TO HELP PAY FOR THE GOOD CAN BE D: PUBLIC GOODS
THE PRINCIPLE THAT NO ONE CAN BE EXCLUDED FROM THE BENEFITS OF A PUBLIC GOOD, EVEN IF THAT PERSON HAS NOT PAID FOR IT.: EXCLUSION PRINCIPLE
A PROBLEM THAT ARISES WHEN INDIVIDUALS PRESUME THAT OTHERS WILL PAY FOR PUBLIC GOODS SO THAT, INDIVIDUALLY, THEY CAN ESCAPE PAYING FOR THEIR PORTION WITHOUT CAUSING A REDUCTION IN PRODUCTION.: FREE-RIDER PROBLEM
A GOOD THAT HAS BEEN DEEMED SOCIALLY DESIRABLE THROUGH THE POLITICAL PROCESS. MUSEUMS ARE AN EXAMPLE. GOVERMENT SAYS, "SUPPORT OF THE ARTS MAY BE OF VALUE TO SOCIETY".: MERIT GOOD
A GOOD THAT HAS BEEN DEEMED SOCIALLY UNDESIRABLE THROUGH THE POLITICAL PROCESS. HEROINIS AN EXAMPLE. ILLEGAL DRUGS IS A DEMERIT GOOD.: DEMERIT GOOD
PAYMENTS THAT ARE IN THE FORM OF ACTUAL GOODS AND SERVICES, SUCH AS FOOD STAMPS, SUBSIDIZED PUBLIC HOUSING, AND MEDICAL CARE, AND FOR WHICH IN RETURN NO GOODS OR SERVICES ARE RENDERED IN RETURN. AKA "INCOME REDISTRIBUTION". EXAMPLES ARE: WELFARE, FOOD: TRANSFERS IN KIND
MANY PAYMENTS MADE BY GOVERNMENTS TO INDIVIDUALS FOR WHICH NO SERVICES OR GOODS ARE RENDERED IN RETURN. EXAMPLES ARE SOCIAL SECURITY OLD-AGE AND DISABILITY BENEFITS AND UNEMPLOYMENT INSURANCE BENEFITS. AKA "INCOME REDISTRIBUTION": TRANSFER PAYMENTS
HOW VOTERS, POLITICIANS, AND OTHER INTERESTED PARTIES ACT AND HOW THESE ACTIONS INFLUENCE NONMARKET DECISIONS.: COLLECTIVE DECISION MAKING
THE STUDY OF COLLECTIVE DECISION MAKING.: THEORY OR PUBLIC CHOICE
THE SYSTEM OF REWARDS AND PUNISHMENTS INDIVIDUALS FACE WITH RESPECT TO THEIR OWN ACTIONS.: INCENTIVE STRUCTURE
GOODS (AND SERVICES) PROVIDED BY THE PUBLIC SECTOR; THEY CAN BE EITHER PRIVATE OR PUBLIC GOODS.: GOVERNMENT, OR POLITICAL, GOODS
A COLLECTIVE DECISION-MAKING SYSTEM IN WHICH GROUP DECISIONS ARE MADE ON THE BASIS OF MORE THAN 50 PERCENT OF THE VOTE. IN OTHER WORDS, WHATEVER MORE THAN HALF OF THE ELECTORATE VOTES FOR, THE ENTIRE ELECTORATE HAS TO ACCEPT.: MAJORITY RULE
A DECISION-MAKING SYSTEM IN WHICH ACTIONS ARE BASED ON THE PROPORTION OF THE "VOTES" CAST AND ARE IN PROPORTION TO THEM. IN A MARKET SYSTEM, IF 10 PERCENT OF THE "DOLLAR VOTES" ARE CAST FOR BLUE CARS, 10 PERCENT OF THE OUTPUT WILL BE BLUE CARS.: PROPORTIONAL RULE
THE LIMIT ON GOVERNMENT SPENDING AND TRANSFERS IMPOSED BY THE FACT THAT EVERY DOLLAR THE GOVERNMENT SPENDS, TRANSFERS, OR USES TO REPAY BORROWED FUNDS MUST ULTIMATELY BE PROVIDED BY THE TAXES IT COLLECTS.: GOVERNMENT BUDGET CONSTRAINT
THE VALUE OF GOODS, SERVICES, WEALTH, OR INCOMES SUBJECT TO TAXATION.: TAX BASE
THE PROPORTION OF A TAX BASE THAT MUST BE PAID TO A GOVERNMENT AS TAXES.: TAX RATE
THE CHANGE IN THE TAX PAYMENT DIVIDED BY THE CHANGE IN INCOME, OR THE PERCENTAGE OF ADDITIONAL DOLLARS THAT MUST BE PAID IN TAXES. THE MARGINAL TAX RATE IS APPLIED TO THE HIGHEST TAX BRACKET OF TAXABLE INCOME REACHED.: MARGINAL TAX RATE
A SPECIFIED INTERVAL OF INCOME TO WHICH A SPECIFIC AND UNIQUE MARGINAL TAX RATE IS APPLIED.: TAX BRACKET
THE TOTAL TAX PAYMENT DIVIDED BY TOTAL INCOME. IT IS THE PROPORTION OF TOTAL INCOME PAID IN TAXES.: AVERAGE TAX RATE
A TAX SYSTEM IN WHICH, REGARDLESS OF AN INDIVIDUAL'S INCOME, THE TAX BILL COMPRISES EXACTLY THE SAME PROPORTION.: PROPORTIONAL TAXATION
A TAX SYSTEM IN WHICH, AS INCOME INCREASES, A HIGHER PERCENTAGE OF THE ADDITIONAL INCOME IS PAID AS TAXES. THE MARGINAL TAX RATE EXCEEDS THE AVERAGE TAX RATE AS INCOME RISES.: PROGRESSIVE TAXATION
A TAX SYSTEM IN WHICH AS MORE DOLLARS ARE EARNED; THE PERCENTAGE OF TAX PAID ON THEM FALLS. THE MARGINAL TAX RATE IS LESS THAN THE AVERAGE TAX RATE AS INCOME RISES.: REGRESSIVE TAXATION
THE POSITIVE DIFFERENCE BETWEEN THE PURCHASE PRICE AND THE SALE PRICE OF AN ASSET. IF A SHARE OF STOCK IS BOUGHT FOR $5 AND THEN SOLD FOR $15, THE CAPITAL GAIN IS $10.: CAPITAL GAIN
THE NEGATIVE DIFFERENCE BETWEEN THE PURCHASE PRICE AND THE SALE PRICE OF AN ASSET.: CAPITAL LOSS
EARNINGS THAT A CORPORATION SAVES, OR RETAINS, FOR INVESTMENT IN OTHER PRODUCTIVE ACTIVITIES; EARNINGS THAT ARE NOT DISTRIBUTED TO STOCKHOLDERS.: RETAINED EARNINGS
THE DISTRIBUTION OF TAX BURDENS AMONG VARIOUS GROUPS IN SOCIETY.: TAX INCIDENCE
TAXES ASSESSED ON THE PRICES PAID ON A LARGE SET OF GOODS AND SERVICES.: SALES TAXES
ASSESSING TAXES BY CHARGING A TAX RATE EQUAL TO A FRACTION OF THE MARKET PRICE OF EACH UNIT PURCHASED.: AD VALOREM TAXATION
ECONOMIC EVALUATION OF THE EFFECTS OF TAX RATE CHANGES UNDER THE ASSUMPTION THAT THERE IS NO EFFECT ON THE TAX BASE, MEANING THAT THERE IS AN UNAMBIGUOUS POSITIVE RELATIONSHIP BETWEEN TAX RATES AND TAX REVENUES. IT CAN BECOME A PROHIBITED TAX UNWILLINGLY: STATIC TAX ANALYSIS
ECONOMIC EVALUATION OF TAX RATE CHANGES THAT RECOGNIZES THAT THE TAX BASE EVENTUALLY DECLINES WITH EVEN HIGHER TAX RATES, SO THAT TAX REVENUES MAY EVENTUALLY DECLINE IF THE TAX RATE IS RAISED SUFFICIENTLY. IT IS MORE FLEXIBLE TO CAPPING OR MONITORING THE: DYNAMIC TAX ANALYSIS
A TAX LEVIED ON PURCHASES OF A PARTICULAR GOOD OR SERVICE.: EXCISE TAX
A CONSTANT TAX ASSESSED ON EACH UNIT OF A GOOD THAT CONSUMERS PURCHASE.: UNIT TAX
THE MANDATORY TAXES PAID OUT OF WORKERS' WAGES AND SALARIES. ALTHOUGH HALF ARE SUPPOSEDLY PAID BY EMPLOYERS, IN FACT THE NET WAGES OF EMPLOYEES ARE LOWER BY THE FULL AMOUNT.: SOCIAL SECURITY CONTRIBUTIONS
THE PROPORTIONAL ANNUAL BENEFIT THAT RESULTS FROM MAKING AN INVESTMENT.: RATE OF RETURN
A RATE OF RETURN THAT IS MEASURED IN TERMS OF REAL GOODS AND SERVICES; THAT IS, AFTER THE EFFECTS OF INFLATION HAVE BEEN FACTORED OUT.: INFLATION-ADJUSTED RETURN
FEDERAL AND STATE/LOCAL: GOVERNMENT BROKEN INTO 2 GROUPS
1. MEDICARE 2. EDUCATION 3. SOCIAL SECURITY: 3 PREDOMINANT ECONOMIC ISSUES IN THE PUBLIC SECTOR
THE TOTAL NUMBER OF ADULTS (AGED 16 YEARS OR OLDER) WHO ARE WILLING AND ABLE TO WORK AND WHO ARE ACTIVELY LOOKING FOR WORK BUT HAVE NOT FOUND A JOB.: UNEMPLOYMENT
INDIVIDUALS AGED 16 YEARS OR OLDER WHO EITHER HAVE JOBS OR WHO ARE LOOKING AND AVAILABLE FOR JOBS; THE NUMBER OF EMPLOYED PLUS THE NUMBER OF UNEMPLOYED.: LABOR FORCE
THE QUANTITY OF SOMETHING, MEASURED AT A GIVEN POINT IN TIME-FOR EXAMPLE, AN INVENTORY OF GOODS OR A BANK ACCOUNT. STOCKS ARE DEFINED INDEPENDENTLY OF TIME, ALTHOUGH THEY ARE ASSESSED AT A POINT IN TIME.: STOCK
A QUANTITY MEASURED PER UNIT OF TIME; SOMETHING THAT OCCURS OVER TIME, SUCH AS THE INCOME YOU MAKE PER WEEK OR PER YEAR OR THE NUMBER OF INDIVIDUALS WHO ARE FIRED EVERY MONTH.: FLOW
AN INDIVIDUAL IN THE LABOR FORCE WHOSE EMPLOYMENT WAS INVOLUNTARILY TERMINATED.: JOB LOSER
AN INDIVIDUAL WHO USED TO WORK FULL-TIME BUT LEFT THE LABOR FORCE AND HAS NOW REENTERED IT LOOKING FOR A JOB.: REENTRANT
AN INDIVIDUAL IN THE LABOR FORCE WHO QUITS VOLUNTARILY.: JOB LEAVER
AN INDIVIDUAL WHO AS NEVER HELD A FULL-TIME JOB LASTING TWO WEEKS OR LONGER BUT IS NOW SEEKING EMPLOYMENT.: NEW ENTRANT
INDIVIDUALS WHO HAVE STOPPED LOOKING FOR A JOB BECAUSE THEY ARE CONVINCED THAT THEY WILL NOT FIND A SUITABLE ONE.: DISCOURAGED WORKERS
THE PERCENTAGE OF NONINSTITUTIONALIZED WORKING-AGE INDIVIDUALS WHO ARE EMPLOYED OR SEEKING EMPLOYMENT.: LABOR FORCE PARTICIPATION RATE
UNEMPLOYMENT DUE TO THE FACT THAT WORKERS MUST SEARCH FOR APPROPRIATE JOB OFFERS. THIS TAKES TIME, AND SO THEY REMAIN TEMPORARILY UNEMPLOYED.: FRICTIONAL UNEMPLOYMENT
UNEMPLOYMENT RESULTING FROM A POOR MATCH OF WORKERS' ABILITIES AND SKILLS WITH CURRENT REQUIREMENTS OF EMPLOYERS.: STRUCTURAL UNEMPLOYMENT
UNEMPLOYMENT RESULTING FROM BUSINESS RECESSIONS THAT OCCUR WHEN AGGREGATE (TOTAL) DEMAND IS INSUFFICIENT TO CREATE FULL EMPLOYMENT.: CYCLICAL UNEMPLOYMENT
UNEMPLOYMENT RESULTING FROM THE SEASONAL PATTERN OF WORK IN SPECIFIC INDUSTRIES. IT IS USUALLY DUE TO SEASONAL FLUCTUATIONS IN DEMAND OR TO CHANGING WEATHER CONDITIONS, RENDERING WORK DIFFICULT, IF NOT POSSIBLE, AS IN THE AGRICULTURE, CONSTRUCTION, AND T: SEASONAL UNEMPLOYMENT
AN ARBITRARY LEVEL OF UNEMPLOYMENT THAT CORRESPONDS TO "NORMAL" FRICTION IN THE LABOR MARKET. IN 1986, A 6.5 PERCENT RATE OF UNEMPLOYMENT WAS CONSIDERED FULL EMPLOYMENT. TODAY, IT IS ASSUMED TO BE AROUND 5 PERCENT.: FULL EMPLOYMENT
THE RATE OF UNEMPLOYMENT THAT IS ESTIMATED TO PREVAIL IN LONG-RUN MACROECONOMIC EQUILIBRIUM, WHEN ALL WORKERS AND EMPLOYERS HAVE FULLY ADJUSTED TO ANY CHANGES IN THE ECONOMY.: NATURAL RATE OF UNEMPLOYMENT
A SUSTAINED INCREASE IN THE AVERAGE OF ALL PRICES OF GOODS AND SERVICES IN AN ECONOMY.: INFLATION
A SUSTAINED DECREASE IN THE AVERAGE OF ALL PRICES OF GOODS AND SERVICES IN AN ECONOMY.: DEFLATION
THE VALUE OF MONEY FOR BUYING GOODS AND SERVICES. IF YOUR MONEY INCOME STAYS THE SAME BUT THE PRICE OF ONE GOOD THAT YOU ARE BUYING GOES UP, YOUR EFFECTIVE PURCHASING POWER FALLS, AND VICE VERSA.: PURCHASING POWER
THE COST OF TODAY'S MARKET BASKET OF GOODS EXPRESSED AS A PERCENTAGE OF THE COST OF THE SAME MARKET BASKET DURING A BASE YEAR.: PRICE INDEX
THE YEAR THAT IS CHOSEN AS THE POINT OF REFERENCE FOR COMPARISON OF PRICES IN OTHER YEARS.: BASE YEAR
A STATISTICAL MEASURE OF A WEIGHTED AVERAGE OF PRICES OF A SPECIFIED SET OF GOODS AND SERVICES PURCHASED BY TYPICAL CONSUMERS IN URBAN AREAS.: CONSUMER PRICE INDEX (CPI)
A STATISTICAL MEASURE OF A WEIGHTED AVERAGE OF PRICES OF GOODS AND SERVICES THAT FIRMS PRODUCE AND SELL.: PRODUCER PRICE INDEX (PPI)
A PRICE INDEX MEASURING THE CHANGES IN PRICES OF ALL NEW GOODS AND SERVICES PRODUCED IN THE ECONOMY.: GDP DEFLATOR
A STATISTICAL MEASURE OF AVERAGE PRICES THAT USES ANNUALLY UPDATED WEIGHTS BASED ON SURVEYS OF CONSUMER SPENDING.: PERSONAL CONSUMPTION EXPENDITURE (PCE) INDEX
THE INFLATION RATE THAT WE BELIEVE WILL OCCUR; WHEN IT DOES, WE ARE IN A SITUATION OF FULLY ANTICIPATED INFLATION.: ANTICIPATED INFLATION
INFLATION AT A RATE THAT COMES AS A SURPRISE, EITHER HIGHER OR LOWER THAN THE RATE ANTICIPATED.: UNANTICIPATED INFLATION
THE MARKET RATE OF INTEREST EXPRESSED IN TODAY'S DOLLARS.: NOMINAL RATE OF INTEREST
THE NOMINAL RATE OF INTEREST MINUS THE ANTICIPATED RATE OF INFLATION.: REAL RATE OF INTEREST
CLAUSES IN CONTRACTS THAT ALLOW FOR INCREASES IN SPECIFIED NOMINAL VALUES TO TAKE ACCOUNT OF CHANGES IN THE COST OF LIVING.: COST-OF-LIVING ADJUSTMENTS (COLAS)
THE COST ASSOCIATED WITH RECALCULATING PRICES AND PRINTING NEW PRICE LISTS WHEN THERE IS INFLATION.: REPRICING, OR MENU, COST OF INFLATION
THE UPS AND DOWNS IN BUSINESS ACTIVITY THROUGHOUT THE ECONOMY.: BUSINESS FLUCTUATIONS
A BUSINESS FLUCTUATION IN WHICH THE PACE OF NATIONAL ECONOMIC ACTIVITY IS SPEEDING UP.: EXPANSION
A BUSINESS FLUCTUATION DURING WHICH THE PACE OF NATIONAL ECONOMIC ACTIVITY IS SLOWING DOWN.: CONTRACTION
A PERIOD OF TIME DURING WHICH THE RATE OF GROWTH OF BUSINESS ACTIVITY IS CONSISTENTLY LESS THAN ITS LONG-TERM TREND OR IS NEGATIVE.: RECESSION
AN EXTREMELY SEVERE RECESSION.: DEPRESSION
EVENTS THAT HAVE BEEN FOUND TO OCCUR BEFORE CHANGES IN BUSINESS ACTIVITY.: LEADING INDICATORS

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Deck Info

Number of cards 160

Created By ab05072007