Econ Ch.4 and Ch.5 Study help

Econ Ch.4 and Ch.5 Study help - economy Supply-side Policy...

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Chapter four: Price Ceiling: A maximum price that sellers may charge for a good, usually set by government. Price Floor: A minimum price below which exchange is not permitted. Minimum Wage: A price floor set under the price of labor. Chapter five: The Great Depression: Biggest recession in U.S. History. 1930’s Inflation: An increase in the overall price level Hyperinflation: A period of very rapid increases in the overall price level. Deflation: A decrease in the overall price level Business Cycle: The cycle of short-term ups and downs in the economy Aggregate Output: The total quantity of goods and services produced in an economy in a given period. Recession: Aggregate output declines for two consecutive quarters. Depression: A prolonged and deep recession. Unemployment Rate: The percentage of the labor force that is unemployed. Fiscal Policy: Government policies concerning taxes and expenditures (spending). Monetary Policy: The tools used by the Federal Reserve to control the quantity of money in the
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Unformatted text preview: economy. Supply-side Policy: Gov’t policies that focus on stimulating aggregate supply instead of aggregate demand. Circular Flow (pg. 102): Transfer Payments: Cash payments made by the Gov’t to ppl who do not supply goods, services, or labor in exchange for those payments. Social Security benefits, veterans’ benefits, and welfare payments The Three market Arenas:-Goods-and –services market-Labor market-Money market Aggregate Demand: the total demand for goods and services in an economy. Aggregate Supply: The total supply of goods and services in an economy. Expansion or Boom: The period in the business cycle from a trough to a peak, during which output and employment rise. Contraction, recession, or slump: The period in the business cycle from a peak down to a trough, during which output and employment fall....
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