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Key TermsKey Terms Economic TheoriesEconomic TheoriesGDP/InflationsGDP/Inflations Government PoliciesGovernment PoliciesUnemployment/EmploymentUnemployment/EmploymentGraphsGraphs

- $100- $100 A negative relationship on graph is a

Left ward shift

- $200An aggregate demand curve shows

the total amount of goods and services demanded in an economy at an overall price level and at a given time

- $300On a productions possibility curve, points outside of the

curve are considered

Unattainble

- $400AS/AD graphs can show which types of gaps

Recessionary and Inflation gaps

- $500A Philips curve can shows the short run trade-off

between

Inflation and unemployment

- $100Consumer goods are goods that are for

The final consumer

- $200The law of demand states that

the higher the price for a good or service, all other things being equal, leads people to demand a smaller quantity of that good or service

- $300The revolving door affect refers to

Going from public sector employment to private sector employment and vice versa

- $400Stagflation is

A period of slow economic growth and relatively high unemployment and inflation

- $500A centrally planned economic system is a system in

which

economic decisions are made by the state or government rather than by the interaction between consumers and businesses

-$100True/False

A communist economy is an example of a centrally planned economy

True

- $200The US is a strong proponent of which economic

theory?

Capitalism

- $300Karl Marx created which economic theory?

Socialism

- $400Adam Smith is considered the father of which type

of economics?

Classical economics

-$500True/False

Keynesian economics believes that the short run is affected by aggregate demand

True

- $100GDP is the

total value of all final goods and services produced in the economy during a given year

- $200The Determinants of GDP are

Consumer spending, government spending, investment spending, an net exports

- $300An inflationary gap is

the distance between current levels of real GDP and full employment GDP

- $400GDP per capita is

average GDP per person

- $500The percentage change per year in a price index is

called

Inflation rate

- $100Automatic stabilizers are designed to

offset fluctuations in the economy without government intervention through policies

- $200A stabilization policy tries to keep economic growth

stable and both

Inflation and unemployment

- $300A fiscal policy is government spending that affects

Macroeconomic conditions

- $400A contraction policy is a reaction to

a rapid economy and works to slow expansion

- $500A policy that seeks to expand the money supply, economic growth, and combat inflation is called

An expansionary policy

- $100The labor force consists of both the

Employed and unemployed

- $200True/False

Only people looking for work and can’t find it are considered unemployed

True

- $300Unemployment due to time workers spend searching

for a job is called

Frictional unemployment

- $400Frictional and structural unemployment is

considered

The Natural Rare of Unemployment

- $500Cyclical Unemployment is

the deviation of the actual rate of unemployment from the natural rate due to a recession.