| A | B |
|---|
| efficient market hypthesis (EMH) | argument that stocks are always PRICED ABOUT RIGHT, and that BARGAINS ARE HARD TO FIND |
| FDIC | Federal Deposit Insurance Corp |
| Laffer curve | GRAPH - LOWER TAX will stimulate HIGHER tax REVENUES |
| Lorenz curve | CURVE showing how much the ACTUAL distribution of INCOME differs from an EQUAL distribution of income |
| automatic stabilizers | program that AUTOMATICALLY provides BENEFITS to OFFSET a change in people's INCOMES, unemployment insurance, entitlement programs |
| market basket | representative COLLECTION of goods and services used to COMPILE A PRICE INDEX |
| ability to pay principle of taxation | BELIEF taxes should be paid ACCORDING TO INCOME REGARDLESS of BENEFITS received |
| creditor | person or institution to whom MONEY IS OWED |
| types of unemployment | frictional, structural, cyclical, seasonal, technological |
| aggregate demand | the TOTAL QUANTITY of goods and services DEMANDED at different PRICE LEVELS |
| aggregate supply | the TOTAL VALUE of goods and services that all firms would PRODUCE in a specific period of time at different PRICE LEVELS |
| cyclical unemployment | related to SWINGS in business CYCLE |
| seasonal unemployment | changes in WEATHER OR DEMAND , construction/winter |
| technological unemployment | replaced by MACHINES |
| structural unemployment | SHORT TERM, between jobs, mismatch of skills |
| discretionary spending | SPENDING for federal programs - must recieve ANNUAL AUTHORIZATION |
| opportunity cost | COST of NEXT BEST alternative use of money, time, resources |
| demand side economics | Believe ECONOMIC STABILITY can be achieved by STIMULATING aggregate DEMAND |
| absolute advantage | COUNTRY'S ability to produce more of a given product than another COUNTRY |
| comparative advantage | COUNTRY'S ability to produce a given product RELATIVELY MORE EFFICIENTLY than another COUNTRY |
| trade barriers | tariffs and quotas |
| fixed costs | COST of production that DOES NOT CHANGE when output changes |
| variable cost | production COST that VARIES (changes) as output changes |
| flat tax | PROPORTIONAL tax on income AFTER a specified THRESHOLD has been reached |
| federal debt | total amount of money the federal govt has BORROWED |
