AP Macroeconomics: Review Terms

Terms with an asterisk (*) to the left need to be in your dictionary

I. Basic Economic Concepts / II. Measurement of Economic Performance / III. National Income and Price
Determination:
macroeconomics / * gross domestic product (GDP) / aggregate demand
microeconomics / gross national product (GNP) / aggregate supply
* scarcity / * multiple counting / consumption schedule
* tradeoffs/opportunity cost / C + Ig + G + Xn / saving schedule
aggregate / W + R + I + P + SA / APC
* ceteris paribus / depreciation/CFC / APS
independent variable / net investment / MPC
dependent variable / stock of capital / MPS
utility / net domestic product (NDP) / saving range
marginal utility / indirect business taxes / dissaving range
land, labor, capital, entrepreneurship
+ Factors of Production / net foreign factor income / * investment demand
* full employment / national income (NI) / expected rate of return
allocative efficiency / personal income (PI) / nominal interest rate
* capital goods / * disposable income (DI) / real interest rate
* consumer goods / consumption / multiplier effect (1/1-MPC)
production possibilities curve/frontier / savings / real domestic output (GDPr)
law of increasing opportunity costs / GDP price index / determinants of aggregate demand
circular flow model / * nominal versus real / determinants of aggregate supply
resource market / * CPI / wealth effect
product market / basket of goods / liquidity wealth
law of demand / GDP deflator / government multiplier
law of supply / per capita / crowding out effect
demand versus quantity demanded / rule of 70/rule of 72 / per unit production costs
diminishing marginal utility / productivity / LRAS
supply versus quantity supplied / rate of growth / SRAS
elastic, inelastic / actual versus potential GDP / Say's Law
equilibrium prices and quantities / GDP gap / Keynesian Fiscal Policy
rationing function of prices / * demand pull inflation / Fed Monetary Policy
ceilings / * cost push inflation / The ratchet
floors / * rate of inflation / sticky wages
* substitute goods / * labor force / nondiscretionary spending
* complementary goods / employed / discretionary spending
* transfer payments / unemployed / * stabilizers
natural monopoly / * discouraged / leaks
spillovers (costs, benefits) / * natural rate of unemployment / injections
subsidy / Okun's law / * budget deficit
normal growth/secular trend / COLA's / * budget surplus
* expansion / anticipated inflation / balanced budget multiplier
* contraction / hyperinflation / expansionary fiscal policy
* peak / * frictional unemployment / contractionary fiscal policy
* trough / * structural unemployment / progressive tax systems
* cyclical unemployment / full employment budget
* seasonal unemployment / supply side policies
* Stagflation / * crowding out effect
IV. Financial Sector / VII. Open Economy: International Trade and Finance
M-1, M-2, M-3 / gold standard
stocks / Bretton Woods system
bonds / WTO
transactional demand / IMF
asset demand / NAFTA
* money market / CAFTA (DR-CAFTA)
* loanable funds market / EU
bond market / * absolute advantage
Federal Board System / * comparative advantage
Board of Governors / * terms of trade
FDIC / * "capital inflow"
OMC (FOMC) / * "capital outflow"
Beige Book / output efficiency
open market operations / input efficiency
future values of money / * trade barriers
fed fund rate / * tariffs
discount rate / non-tariff barriers
prime rate / price dumping
* required reserves / * balance of payments
* excess reserves / * current account
* reserve multiplier (money multiplier) / * capital account
* Liquidity / * trade surplus
* easy money policies / * trade deficit
* tight money policies / * official reserves
* velocity of money / * currency appreciation
net export effect / * currency depreciation
fiscal versus monetary: cause and effect / fixed exchange rates
V. Inflation, Unemployment, and Stabilization Policies / floating exchange rates
Phillips Curve SR / net exports
Phillips Curve LR / dollarization
stagflation / remittances
disinflation effects / purchasing power parity of currencies
Laffer Curve relations / multinational corporations
annually balanced budget / joint ventures
cyclically balanced budget / executive agreements
* crowding out effect / congressional-executive agreements
* MV = PQ / most favored nations (normal trade relations)
VI. Economic Growth and Productivity / ad-valorem tariff
human capital
physical capital
growth policy options