EC 202 Exam Study Sheet

EC 202 Exam Study Sheet - Macroeconomics The study of the...

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Macroeconomics: The study of the performance of national economies including the study of the policies used to improve that performance. Macroeconomic policies: Government actions designed to affect the performance of the economy as a whole. Standard of Living: The degree to which people have access to good and services that make their lives easier, healthier, safer, and more enjoyable. Depends on quantities of goods and services produced and the number of people who share those goods and services. Output per employed worker: Output/Employed Recessions: Slowdowns in economic growth (usually 2 negative quarters of economic growth) Depressions: severe recessions Expansions: periods of rapid economic growth Cost of Living: The number of dollars it takes to buy the goods and services that achieve a given standard of living Inflation: A rising cost of living. The rate at which prices in general are increasing over time. Trade imbalances : Exist when the quantity of goods and services that a country sells abroad (exports) differs significantly from the quantity of goods and services its citizens buy from abroad (imports) Trade deficits: Exist when imports are larger than exports. Trade imbalances: when exports and imports differ significantly Trade Deficit: exports < imports Trade Surplus: exports > imports Fiscal policy: Decisions that determine the government’s budget: expenditures and revenues of the governments A Deficit: Government spends more than what is collected in taxes A Surplus: Government spends less than what is collected in taxes. Structural Policy: A government policy aimed at changing the underlying structure, or institutions, or the nation’s economy. Neither physical or monetary. Positive analysis: Addresses the economic consequences of a particular event or policy. Involves a testable assertion Normative analysis: Judges whether consequences are desirable. Addresses the question of whether a policy should
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This note was uploaded on 10/18/2011 for the course EC 202 taught by Professor Obst during the Spring '08 term at Michigan State University.

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EC 202 Exam Study Sheet - Macroeconomics The study of the...

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