Macroeconomics



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Ebook Macro Economi N. Gregory Mankiw(1)

Cost of capital:

The amount forgone by holding a

unit of capital for one period, including interest, de-

preciation, and the gain or loss from the change in

the price of capital.

Cost-push inflation:

Inflation resulting from shocks

to aggregate supply. (Cf. demand-pull inflation.)

Countercyclical:

Moving in the opposite direction

from output, incomes, and employment over the

business cycle; rising during recessions and falling

during recoveries. (Cf. acyclical, procyclical.)

CPI:

See consumer price index.

Credit crunch:

A change in conditions at financial

institutions that makes it hard for potential borrowers

to obtain loans.



Crowding out:

The reduction in investment that

results when expansionary fiscal policy raises the in-

terest rate.



Currency:

The sum of outstanding paper money

and coins.

Currency board:

A fixed exchange rate system

under which a central bank backs all of the nation’s

currency with the currency of another country.




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