because it takes time for the government spending multiplier to reach its full value, there is a lag between the time a fiscal policy action is initiated and the time the full change in GDP is realized

the growth rate of output per person in the economy the growth rate of output per person in the economy

Standard and Poor 500

a certificate that certifies ownership of a certain portion of a firm

What caused fluctuation in households wealth in the past ?

household feel richer and spend more

when housing and stock values rise what happens

delays in the economy response to stabilization policies

the time it takes for policy makers to recognize the existence of a boom or a slump

exchange rates are determined by making prices of similar goods equal in different countries. If one country has much higher inflation than another, its currency usually loses value compared to the other country's currency

delays in the economy response to stabilization policies

the equilibrium exchange rates occurs at the point which the quantity demanded of a foreign currency equals the quantity of that currency supplied

The U.S dollar is a fiat currency, a fully convertible currency And a floating currency

If the costs of transportation are small,the price of the same good in different countries should beroughly the same

the time it takes for policy makers to recognize the existence of a boom or a slump

because it takes time for the government spending multiplier to reach its full value, there is a lag between the time a fiscal policy action is initiated and the time the full change in GDP is realized

the growth rate of output per worker

the time it takes for the economy to adjust to the new conditions after a new policy is implemented , the lag that occurs because of the operation of the economy itself

the sum of income from exports of goods and services and income rom investments and transfers minus payments for imports of goods and services and payments for investment and transfers

the discovery represents an intention and the finding of a use for the adhesive represent an innovation

The things that influence how much households and businesses spend also affect how much people buy from other countries. This includes both things people use and things they invest in. Additionally, whether domestic or foreign goods are cheaper affects how much people buy from other countries

response lags for fiscal policy

because it takes time for the government spending multiplier to reach its full value, there is a lag between the time a fiscal policy action is initiated and the time the full change in GDP is realized

of essentially fixed exchange rates under which each country agreed to intervene in the foreign exchange market when necessary to maintain the agreed upon value of its currency

The things that influence how much households and businesses spend also affect how much people buy from other countries. This includes both things people use and things they invest in. Additionally, whether domestic or foreign goods are cheaper affects how much people buy from other countries

When prices go up in one country, it can cause prices to rise in other countries too. Then, those higher prices overseas can loop back and push prices even higher in the first country

Response lags for Monetary Policy

the response lags are even longer . when interest rates change the sales of firms do not change until households change their consumption spending or firms change their investment spending

- was the major system of exchange rate determination.• All currencies were priced in terms of gold, with an ounce of gold worth a lot in each currency. -The gold standard implied that a country had little control over its money supply. When major new gold fields were discovered, the world's supply of gold increased.

exchange rates that are determined by the unregulated forces of supply and demand

Describe the nature of deficits during recessions according to economic theory.

they are temporary and don't impose any long-run problems

an increase in real GDP per capita

deficits at full employment have what consequences

a certificate that certifies ownership of a certain portion of a company

-new techniques of production -innovation -better educated workforce

Gramm-Rudman-Hollings Act

-passed by U.S congress -this law is set out to reduce the federal deficit by 36 billion per year with a deficit of zero

-has undesirable macroeconomic consequences -requires cuts in spending or increases in taxes when economy is experiencing problems -policy makers around the glove will have to devise other methods to control growing structural deficits