Monetarist

• Autarky refers to a state of self-sufficiency and is commonly used to describe countries or economies that seek to reduce their dependence on international trade.

• Gresham’s Law states that a legally overvalued currency will force a legally undervalued currency out of circulation.

• The emerging industry theory states that new industries in developing countries need to be protected from competitive pressures until they mature.

• M3 is the total money supply, which includes M2 money as well as large time deposits, institutional money market funds, short-term repurchase agreements and larger liquid funds.

• A negative interest rate policy (NIRP) occurs when the central bank sets its target nominal interest rate at a level below zero percent.

• The theory of optimal currency area (OCA) states that regions that are not limited by national borders and have common features should have a common currency.

• Paper money is the official paper currency of a country, which is used for transactions related to the purchase of goods and services.

• The quantity theory of money is the basis for understanding price changes in relation to the money supply in the economy.

• Abenomics is a set of economic policies championed by Japanese Prime Minister Shinzo Abe when he came to power for the second time in 2012.

• An absolute advantage is when a manufacturer can provide a greater quantity of a product or service for the same price or the same quantity at a lower price than its competitors.

• Aggregate demand measures the total demand for all finished goods and services produced in an economy.

• All goods produced at a certain price in a certain period represent the aggregate supply.

• The balance of payments includes both the current account and the capital account.

• The balance of trade (BOT) is the difference between the value of a country’s imports and exports over a given period and is the largest component of a country’s balance of payments (BOP).

• Base effect refers to the effect that the choice of base of comparison or benchmark can have on the result of a comparison between data points.

• The boom and bust cycle describes the alternating phases of economic growth and recession that characterize modern capitalist economies.

• The Bretton Woods Agreement and the system created a collective international currency exchange regime that operated from the mid-1940s to the early 1970s.

• The word “bureaucracy” implies a complex structure with many levels and procedures.

• A buyer’s market refers to a situation in which buyers have an advantage over sellers in price negotiations.

• The circular flow model demonstrates how money moves from producers to households and back in an endless cycle.

• Containment policies are macroeconomic instruments designed to combat economic distortions caused by an overheated economy.

Cost-push inflation occurs when general prices rise (inflation) due to an increase in the cost of wages and raw materials.#

• Cross elasticity of demand is an economic concept that measures the response of the quantity demanded of one good to a change in the price of another good.

• Cyclical unemployment is the effect of an economic recession or growth on the overall unemployment rate.

• When supply and demand are out of balance, creating market inefficiencies, there is a deadweight loss.