Chap 6 - 11. Exonomic investment a. Expansionof business...

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1. The Business cycle a. Long-run economic growth and short tun flucatuations 2. Rescession a. Output and living standards decline 3. Real GDP a. Value of final goods produced in a given country during a given period of time b. Tells if an economy is growing or not 4. Nominal GDP a. Total of the dollar value of all goods produced in a country using the current prices during the year they were oroduced b. Can increase form one year to the next even if there is no increase in output 5. Unemployment a. Person is in if she is willing to get a job but cannot b. Indicates a nation Is not using all of its resources 6. Inflation a. Increase in overall level of prices 7. Modern economic growth a. Output per person rises compared to earlier times 8. Savings a. Generated when current consumption is lesser then current output b. When spending is less the income 9. Investment a. Happens when resources are deoveted to increasing future output 10. Financial incestment a. Purchase of stocks/bonds in hope for a financial gain
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Unformatted text preview: 11. Exonomic investment a. Expansionof business enterprice b. Only inclues money spend purchasing newly created capital goods 12. Expectations a. People incest with good expecataions b. Thingking the business will be profitable c. But it is not always 13. Shocks a. Situations in which they where expecting one thing to happen but something else did 14. Demand shocks a. Unexpected changes in demand for goods and services 15. Supply shocks a. Unexpected changes in supply of goods and services 16. Inventory a. Manufacturing firms keep these to deal with unexpected changes in demand b. Store of oputput that has been produced but not yet sold 17. Inflexible prices (sticky) a. Explain how unexpected change in demand lead to the fluctuations in GDP and employment that occurs over the course of the business cycle 18. Flexible princes a. Materials that change in reacting with supply and demand i. oil...
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Chap 6 - 11. Exonomic investment a. Expansionof business...

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