CLEP Macro Economics

O real deficit this is a measure of budget shortfall

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o Real deficit: This is a measure of budget shortfall arrived at by adjusting the nominal deficit for inflation. o Real income: A measure of the amount of products that nominal dollars can purchase; nominal income adjusted for inflation. o Real surplus: This is a measure of budget excess arrived at by adjusting the nominal surplus for inflation. o Recession: A phase in the business cycle characterized by decline in real output that persists for more than two consecutive quarters in a year. o Recessionary GDP gap: The amount by which equilibrium output is below potential output; when aggregate demand is less than the productive potential of an economy, representing unused capacity, lost output, and unemployment. o Recessionary gap: The amount by which equilibrium GDP falls short of full-employment GDP. o Recovery: A phase in the business cycle in which expansion begins and growth and employment begin to increase. o Required reserve ratio: The proportion of money kept on hand relative to deposit amounts, set at a required level by the Federal Reserve. o Required reserves: The minimum amount of reserves a bank is required to hold according to Federal Reserve monetary policy; equal to required reserve ratio times transactions deposits. o Reserve ratio: The proportion of money on hand relative to deposits made to store for safety reasons. o Reserves: Cash and deposits that a bank keeps readily available in the bank or at the Federal Reserve. o Revenues: The resources from which government acquires funds, primarily from the collection of individual income taxes. o Rule of 70: A calculation in economics that tells how many years it will take for inflation to double the price level of goods and services; divide 70 by the current inflation rate. S o Savers: Individuals that give other people money now in return for promises to pay it back later with interest. o Say's Law: The production of goods and services (supply) creates an equal demand for those goods and services; this law is no longer a generally accepted macroeconomic perspective. o Scarcity: A term to describe the limited resources available to fulfill a society’s unlimited needs and wants. o Seasonal unemployment: Joblessness that results from seasonal changes in job availability or the labor supply. o Secular growth trend: A change in some variable over a long duration of years; a long-run tendency in a particular direction. o Securities: IOUs issued by the U.S. government in the form of bonds. These are promises to repay a certain amount of money plus interest in the future. o Services: Work provided by other human beings, such as doctors, lawyers, and technical support. o Short-run: A timeframe with different meanings: in microeconomics, it refers to a period during which producers are able to change quantities of some of their factors of production (some are fixed and some are variable); in macroeconomics, it refers to a period during which nominal wages and other factor prices do not change in response to
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o Real deficit This is a measure of budget shortfall...

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