Macro Unit 5 and 6
depreciation
A decrease or loss in value -buying more stuff imports decrease and exports increase because they are cheap to other countries
expansionary monetary and fiscal
Increase: -Ad -PL -real GDP Decrease: -unemployment Indeterminate: -interest rates -gross investment -economic growth
contractionary monetary and expansionary fiscal
Increase: -interest rates Decrease: -gross investment -economic growth Indeterminate: -AD -PL -real GDP -unemployment
demand elasticity
% change in quantity demanded / % change in price price elasticity > 1 = elastic price elasticity < 1 = inelastic
economic growth
-better resources quantity ( land, labor, capital ) -better resources quality ( productivity )
counts in gdp
-final goods / services -capital goods -new construction of structures -inventories
does not count in gdp
-intermediate goods -inputs -used goods -financial assets -foreign made products
appreciation
An increase in the value of a currency -demand increase -exports decrease because they are expensive to other countries, imports increase
M2
M1 plus savings accounts, certificates of deposit, and other liquid assets
fixed exchange rate
The government activity manages the country's currency
budget deficit
a situation in which the government spends more than it takes in
budget surplus
a situation in which the government takes in more than it spends
current account
account that tracks trade deficits
national debt
accumulation of all previous deficits and surpluses
physical capital
all human-made goods that are used to produce other goods and services; tools and buildings
floating exchange rate
market determines rate
M1
currency, demand deposits, traveler's checks, and other checkable deposits
ERIPT
current account: -exports -receipts from overseas assets -imports -payment income -transfers (net)
implicit liabilities
debts that have not occurred yet
surplus
exports more than imports
FRUR
financial capital: -foreign owned us assets -reserves foreign -us assets abroad -reserves us
deficit
imports more than exports
supply elasticity
small quantity change = inelastic big quantity change = elastic
deficit
taxes < spending
surplus
taxes > spending
human capital
the skills and knowledge gained by a worker through education and experience
financial capital account
tracks changes in assets
current
tracks exports ( inflow )
capital
tracks foreign owned us assets ( inflow )
capital
tracks foreign reserves ( inflow )
current
tracks imports ( outflow )
current
tracks income payments ( inflow )
current
tracks net transfers ( inflow )
current
tracks receipts from overseas assets ( inflow )
capital
tracks us assets abroad ( outflow )
capital
tracks us reserves ( outflow )
ADAS
what graph does the Phillips curve MIRROR
increases
what happens to inflation if the government spends money
high
you want to buy assets when interest rates are...