12.7 KEY TERMS

image | interactive activity

Match each of the terms on the left with its definition on the right. Click on the term first and then click on the matching definition. As you match them correctly they will move to the bottom of the activity.

Question

Self-regulating economy
Keynesian economics
Monetary policy
Fiscal policy
Recession
Expansion
Business cycle
Business-cycle peak
Business-cycle trough
Long-run economic growth
Inflation
Deflation
Price stability
Open economy
Trade deficit
Trade surplus
period of economic upturn in which output and employment are rising; most economic numbers are following their normal upward trend; also referred to as a recovery.
when the value of goods and services bought from foreigners is less than the value of the goods and services sold to them.
a theory that states that economic slumps are caused by inadequate spending and they can be mitigated by government intervention.
the point in time at which the economy shifts from recession to expansion.
a fall in the overall level of prices.
changes in government spending and taxes designed to affect overall spending.
the sustained upward trend in the economy’s output over time.
changes in the quantity of money in circulation designed to alter interest rates and affect the level of overall spending.
the point in time at which the economy shifts from expansion to recession.
a situation in which the overall level of prices is changing slowly or not at all.
an economy that trades goods and services with other countries.
an economy in which problems such as unemployment are resolved without government intervention, through the working of the invisible hand.
when the value of the goods and services bought from foreigners is more than the value of the goods and services sold to consumers abroad.
a rise in the overall level of prices.
the short-run alternation between economic recessions and expansions.
a period of economic downturn when output and unemployment are falling; also referred to as a contraction.