ECN 211 MACROECONOMICS FINAL VOCABULARY
VERIFIED ACCURATE STUDY GUIDE
Bar chart - Answers -A chart or graph that presents grouped or unordered data with
rectangular bars with lengths proportional to the values that they represent. The bars
can be plotted vertically or horizontally.
Normative statement - Answers -Statement which describes the world as it should be. It
is an expression of judgment and not verifiable.
Positive statement - Answers -Statement which describes the world as it is. It is
verifiable.
Scatter plot - Answers -Type of plot or mathematical diagram using Cartesian
coordinates to display values for typically two variables for a set of data.
Slope - Answers -The ratio of the "vertical change" to the "horizontal change" between
(any) two distinct points on a line.
Time series - Answers -A series of data points indexed (or listed or graphed) in time
order.
Borrow - Answers -To receive (money) from somebody temporarily, expecting to return
it (often with interest).
Circular flow diagram - Answers -Diagram that pictures the economy as consisting of
four main sectors that interact with each other through different markets and in which
financial institutions help to facilitate (some of) the interactions.
Debt - Answers -An obligation (usual money) owed by one party, the borrower or
debtor, to a second party, the lender or creditor.
Economics - Answers -The study of how humans make decisions in the face of
scarcity.
Great Recession - Answers -Global economic downturn that started in 2008.
International economics - Answers -The branch of economics that is concerned with
the effects upon economic activity from international differences in productive resources
and consumer preferences and the international institutions that affect them. It seeks to
explain the patterns and consequences of transactions and interactions between the
inhabitants of different countries, including trade, investment and migration.
,Invisible Hand - Answers -The idea that the joint pursuit of self-interest and the
allocation of resources using markets leads to (relatively) efficient economic outcomes.
Macroeconomics - Answers -The part of economics that studies the outcomes and
decision making as it relates to the economy as a whole.
Microeconomics - Answers -The part of economics that studies the behavior of
individuals and firms in making decisions regarding the allocation of limited resources.
Opportunity cost - Answers -The gain from alternative choices sacrificed when a
current choice is decided upon.
Scarcity - Answers -The fundamental economic problem of having seemingly unlimited
human wants in a world of limited resources.
Stock and flow - Answers -A stock variable is measured at one specific time, and
represents a quantity existing at that point in time, which may have accumulated in the
past. A flow variable is measured over an interval of time. Therefore a flow would be
measured per unit of time (say a year). It is roughly analogous to rate or speed in this
sense.
Theory - Answers -A group of linked ideas intended to explain something. It provides a
framework for explaining observations. The explanations are based on assumptions.
From the assumptions follows a number of possible hypotheses which can be tested to
provide support for, or challenge, it.
Business cycle - Answers -The downward and upward movement of Gross Domestic
Product (GDP) around its long-term growth trend.
Data revision - Answers -When economic statistics change because they get updated
to reflect the inclusion of new information (or sometimes a change in definition or
measurement methodology).
Factor income - Answers -Income derived from selling the services of factors of
production.
GDP deflator - Answers -Measure of the level of prices of all new, domestically
produced, final goods and services in an economy.
Gross Domestic Income (GDI) - Answers -Total income received by all sectors of an
economy within a state. It includes the sum of all wages, profits, and taxes, minus
subsidies.
Gross Domestic Product (GDP) - Answers -A monetary measure of the market value of
all final goods and services produced in a period (quarterly or yearly).
, Industrial Revolution - Answers -The transition to new manufacturing processes in the
period from about 1760 to sometime between 1820 and 1840. This transition included
going from hand production methods to machines, new chemical manufacturing and
iron production processes, improved efficiency of water power, the increasing use of
steam power, the development of machine tools and the rise of the factory system.
Inventory - Answers -The goods and materials that a business holds for the ultimate
purpose of resale (or repair).
National accounts - Answers -The implementation of complete and consistent
accounting techniques for measuring the economic activity of a nation.
National debt - Answers -The sum of all past federal deficits, minus any surpluses.
Net exports - Answers -The difference between the monetary value of a nation's
exports and imports over a certain period.
Nominal - Answers -A value that is measured in dollars (or other currency) in current
prices. It is not adjusted for inflation.
Personal consumption expenditures - Answers -The goods and services purchased by
persons.
Price index - Answers -Over time: measure of price at a particular point in time, t,
relative to that in a base period, b, i.e. Pt/Pb. It is an index because it does not measure
the price level but instead the cumulative growth in the price level between t and b.
Across regions/countries Instead of comparing a period with a baseperiod, a bilateral
price index across regions or countries measures the price in a country or region
relative to the price in a base country.
Real - Answers -A value that is relative to other commodities or goods. It is adjusted for
inflation, enabling comparison of quantities as if prices had not changed.
Recession - Answers -A business cycle contraction which results in a general
slowdown in economic activity.
Statistical discrepancy - Answers -The difference between Gross Domestic Product
(GDP) and Gross Domestic Income (GDI).
Stylized fact - Answers -A simplified presentation of an empirical finding. Often a broad
generalization that summarizes some complicated statistical calculations, which
although essentially true may have inaccuracies in the detail.
Trade balance - Answers -The difference between the monetary value of a nation's
exports and imports over a certain period. See also "net exports". When this is negative
it is called a trade deficit and when positive a trade surplus.
VERIFIED ACCURATE STUDY GUIDE
Bar chart - Answers -A chart or graph that presents grouped or unordered data with
rectangular bars with lengths proportional to the values that they represent. The bars
can be plotted vertically or horizontally.
Normative statement - Answers -Statement which describes the world as it should be. It
is an expression of judgment and not verifiable.
Positive statement - Answers -Statement which describes the world as it is. It is
verifiable.
Scatter plot - Answers -Type of plot or mathematical diagram using Cartesian
coordinates to display values for typically two variables for a set of data.
Slope - Answers -The ratio of the "vertical change" to the "horizontal change" between
(any) two distinct points on a line.
Time series - Answers -A series of data points indexed (or listed or graphed) in time
order.
Borrow - Answers -To receive (money) from somebody temporarily, expecting to return
it (often with interest).
Circular flow diagram - Answers -Diagram that pictures the economy as consisting of
four main sectors that interact with each other through different markets and in which
financial institutions help to facilitate (some of) the interactions.
Debt - Answers -An obligation (usual money) owed by one party, the borrower or
debtor, to a second party, the lender or creditor.
Economics - Answers -The study of how humans make decisions in the face of
scarcity.
Great Recession - Answers -Global economic downturn that started in 2008.
International economics - Answers -The branch of economics that is concerned with
the effects upon economic activity from international differences in productive resources
and consumer preferences and the international institutions that affect them. It seeks to
explain the patterns and consequences of transactions and interactions between the
inhabitants of different countries, including trade, investment and migration.
,Invisible Hand - Answers -The idea that the joint pursuit of self-interest and the
allocation of resources using markets leads to (relatively) efficient economic outcomes.
Macroeconomics - Answers -The part of economics that studies the outcomes and
decision making as it relates to the economy as a whole.
Microeconomics - Answers -The part of economics that studies the behavior of
individuals and firms in making decisions regarding the allocation of limited resources.
Opportunity cost - Answers -The gain from alternative choices sacrificed when a
current choice is decided upon.
Scarcity - Answers -The fundamental economic problem of having seemingly unlimited
human wants in a world of limited resources.
Stock and flow - Answers -A stock variable is measured at one specific time, and
represents a quantity existing at that point in time, which may have accumulated in the
past. A flow variable is measured over an interval of time. Therefore a flow would be
measured per unit of time (say a year). It is roughly analogous to rate or speed in this
sense.
Theory - Answers -A group of linked ideas intended to explain something. It provides a
framework for explaining observations. The explanations are based on assumptions.
From the assumptions follows a number of possible hypotheses which can be tested to
provide support for, or challenge, it.
Business cycle - Answers -The downward and upward movement of Gross Domestic
Product (GDP) around its long-term growth trend.
Data revision - Answers -When economic statistics change because they get updated
to reflect the inclusion of new information (or sometimes a change in definition or
measurement methodology).
Factor income - Answers -Income derived from selling the services of factors of
production.
GDP deflator - Answers -Measure of the level of prices of all new, domestically
produced, final goods and services in an economy.
Gross Domestic Income (GDI) - Answers -Total income received by all sectors of an
economy within a state. It includes the sum of all wages, profits, and taxes, minus
subsidies.
Gross Domestic Product (GDP) - Answers -A monetary measure of the market value of
all final goods and services produced in a period (quarterly or yearly).
, Industrial Revolution - Answers -The transition to new manufacturing processes in the
period from about 1760 to sometime between 1820 and 1840. This transition included
going from hand production methods to machines, new chemical manufacturing and
iron production processes, improved efficiency of water power, the increasing use of
steam power, the development of machine tools and the rise of the factory system.
Inventory - Answers -The goods and materials that a business holds for the ultimate
purpose of resale (or repair).
National accounts - Answers -The implementation of complete and consistent
accounting techniques for measuring the economic activity of a nation.
National debt - Answers -The sum of all past federal deficits, minus any surpluses.
Net exports - Answers -The difference between the monetary value of a nation's
exports and imports over a certain period.
Nominal - Answers -A value that is measured in dollars (or other currency) in current
prices. It is not adjusted for inflation.
Personal consumption expenditures - Answers -The goods and services purchased by
persons.
Price index - Answers -Over time: measure of price at a particular point in time, t,
relative to that in a base period, b, i.e. Pt/Pb. It is an index because it does not measure
the price level but instead the cumulative growth in the price level between t and b.
Across regions/countries Instead of comparing a period with a baseperiod, a bilateral
price index across regions or countries measures the price in a country or region
relative to the price in a base country.
Real - Answers -A value that is relative to other commodities or goods. It is adjusted for
inflation, enabling comparison of quantities as if prices had not changed.
Recession - Answers -A business cycle contraction which results in a general
slowdown in economic activity.
Statistical discrepancy - Answers -The difference between Gross Domestic Product
(GDP) and Gross Domestic Income (GDI).
Stylized fact - Answers -A simplified presentation of an empirical finding. Often a broad
generalization that summarizes some complicated statistical calculations, which
although essentially true may have inaccuracies in the detail.
Trade balance - Answers -The difference between the monetary value of a nation's
exports and imports over a certain period. See also "net exports". When this is negative
it is called a trade deficit and when positive a trade surplus.
