Exchange rateThe price of one currency in terms of a second currency. |
ExpansionA period where real GDP is growing. |
Expansionary fiscal policyIncreases in government spending or lower net taxes meant to shift the aggregate expenditure function upward and shift ad to the right. |
Expansionary monetary policyDesigned to fix a recession and increase AD, lower the u%, and increase GDP |
Expected (anticipated) inflationThe inflation expected in a future time period. This expected inflation is added to the real interest rate to compensate for lost purchasing power. |
Expected real rate of return.The rate of real profit the firm anticipates receiving on investment expenditures. This is the marginal benefit of an investment project. |
Federal funds rateThe i% paid on short terms loans made from one bank to another. |
Fiat moneyPaper and coin money used to make transactions because the government declares it to be legal tender. |
Final goodsGoods that are ready for their final use by consumers and firms. |
Fiscal policyDeliberate changes in government spending and net tax collection to affect economic output, unemployment, and the price level. Fiscal policy is typically designed to manipulate ad to “fix’ the economy. |