Final Flashcards
Economics 103 with Baer at University of Illinois - Urbana-Champaign
About this deck
By: Ember Schuldt
Textbook:
Principles of Macroeconomics
Created: 2010-12-06
Size: 22 flashcards
Views: 108
Textbook:
Principles of MacroeconomicsCreated: 2010-12-06
Size: 22 flashcards
Views: 108
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Supply-side Economics
advocate lower taxes, less government regualtion, and less government spending
graph says if you have very high taxes, the governement is collecting less revenue than it could be getting if the tax rate was lower
exchange rate
is the price of one currency in terms of another
appreciation
increase in the price of a measured
depreciation
decrease in the price of currency
trade deficit
imports-exports= when imports are greater than exports
trade surplus
exports-imports= when exports are greater than imports
Price Effect (cost effect)
is actually a cost effect because it changes the cost of production, thus affecting the Supply of goods
Income Effect
affects the demand of goods
Income = expenditure equilibrium equation
Y= C + I + G + X - M or
Y= (Co + MPC*Y) + I + G + X - (Mo + MPM*Y) wher Co= autonomous consumption and Mo= autonomous imports
MPM
Marginal Propensity to Import = by how much imports change when incomes changes by $1
Internal equilibrium
full employment with price stability (low inflation)
External equilibrium
balance of payments equilibrium (no need for loans to equilibrate the balance of payments)
Flexible (Floating) Exchange Rate
exchange rate is determined by the market (demand and supply of the currency)
Gold Standard
government guarantees to trade (buy or sell) the national currency for gold at a FIXED rate.
Pegged Exchange Rate
the rate is legally determined (only the government can change it), markets have no influence on such exchange rate
Foreign Reserves
Foreign currency held by some country's central bank
Speculation
an oppurtunity to profit on future market developments (for example, buy dollar cheap now to sell it at a higher price after devaluation)
disguised unemployment
the portion of the labor force that has marginal productivity (marginal product of labor) equal
to 0 is considered disguisedly unemployed
to 0 is considered disguisedly unemployed
dumping
exporting a good or service at a price below its cost of production
absolute advantage
a country has as absolute advantage in producing a good if the country can produce the good with fewer resources then its trading partners
comparative advantage
country has a comparative advantage in producing a good if the country can produce the good with a lower oppurtunity cost then its trading partners
About this deck
By: Ember Schuldt
Textbook: Principles of Macroeconomics
Created: 2010-12-06
Size: 22 flashcards
Views: 108
Textbook:
Principles of MacroeconomicsCreated: 2010-12-06
Size: 22 flashcards
Views: 108
About StudyBlue
STUDYBLUE makes things that make you better at school.
Things like online flashcards with photos and audio.
Things like personalized quizzes and friendly reminders about when (and what) to study next.
Think of it as a digital backpack™: access to all of your study materials online and on your phone.
STUDYBLUE exists to make studying efficient and effective for every student, for free. Join us.
“I have been getting MUCH better grades on all my tests for school. Flash cards, notes, and quizzes are great on here. Thanks!”
Kathy
Kathy