2. Yield Curve
!
Represents the
relationship between the
cost of borrowing or
interest rate that a bond
pays and when it matures.
3. CPI and Inflation
Denotes a rise in prices per unit of
money. The inflation rate is usually
reported as the annual percentage
growth of the cost of goods. For
example, one dollar buys less each
year. Inflation can also be thought of as
the decrease in the purchasing power
of a particular currency. In the United
States, the inflation rate is most
commonly measured by the rise in the
Consumer Price Index or CPI as
reported by the Bureau of Labor
Statistics. An example of the CPI might
be 110 in the current period, that would
mean it takes $110 to purchase a
basket of goods that $100 used to
purchase.
4. Aggregate Supply - The total supply of goods and services
that an economy produces at a given price level during a specific
time period. The aggregate supply curve describes the
relationship of prices and output that firms are willing to provide.
5. Aggregate Demand - The total amount of goods and
services demanded in the economy at an overall price level
during a specific time period. The aggregate demand curve
shows the relationship between price levels and the quantity of
output that firms are willing to provide.
6. Liquidity
How much an asset or security can
be bought or sold for without
affecting it's price. Liquidity often
means a high level of trading. Assets
or securities that can be easily bought
or sold are known as liquid assets.
!
7. Budget Deficits
The opposite of a surplus.
Excess spending over a
particular period of time. They
can be used as income for a
government, corporation, or
individual. For the federal
government of the United
States are financed by Treasury
Bonds being issued. For
individuals that accumulate
huge debts must declare
bankruptcy if the debt cannot
be serviced.
8. GDP and GNP- GDP measures the output of all labor and
capital within a country. GNP measures the output supplied by
residents of the United States regardless of where they live and
work. Put simply, the GDP measures production in the United
States, while GNP emphasizes U.S. income resulting from
production.