Term
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Definition
| Change in vertical distance / change in horizontal distance |
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Term
| PPF Production Possibilities Frontier |
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Definition
| Line represents boundary between inefficient use of resources (bottom left side) and unattainable goals (top right side) |
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Term
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Definition
| Gross income - Taxes + Transfer payments |
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Term
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Definition
| Taxes - transfer payments |
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Term
| GDP Gross Domestic Product |
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Definition
| Disposable income + net taxes |
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Term
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Definition
C + I + G + (X-M)
Consumer spending + Investments + Gov't purchases + (Exports less imports) |
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Term
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Definition
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Term
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Definition
| Actual final goods and services adjusted for inflation |
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Term
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Definition
| Final goods and services using prices at time of production |
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Term
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Definition
Nominal GDP / Real GDP x 100
Average price of all goods and services |
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Term
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Definition
Current price less base price, then... Answer / current price
If figuring the CPI, would use this formula and multiply result by 100 |
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Term
| Leakage or injection into economy |
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Definition
S + NT + M = I + G + X Savings + Net Taxes + Imports = Investments + Gov't Spending + Exports
Savings, Net Taxes and Imports are Leakages
Investments, Gov't Purchases and Exports are Injections |
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Term
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Definition
| number of unemployed / labor force |
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Term
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Definition
| Number of people working and looking for work |
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Term
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Definition
How much more would you consume, given a certain increase in income?
change in consumption / change in income |
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Term
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Definition
How much more would you save, given a certain increase in income?
change in saving / change in income |
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Term
| Simple Spending Multiplier |
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Definition
How much of an increase in spending is needed to generate a desired effect?
1 / MPS = 1 / (1-MPC) answer is the multiplier to use to calc effect |
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Term
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Definition
Change in GDP x 1 / (1-MPC) or
(-MPC x change in Net Taxes) x 1 / (1-MPC)
Change in Net Taxes x -MPC / (1-MPC) |
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Term
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Definition
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Term
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Definition
Measures how well money is circulating in the economy
Money Supply x Velocity=Price Level x Year GDP |
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Term
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Definition
Average number of times a dollar is used in a year
Price Level x Y GDP / Money Supply |
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Term
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Definition
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Term
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Definition
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