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SECURITIES AND EXCHANGE COMMISSION: (SEC) A federal government agency that regulates the trading of corporate stock to protect investors against unscrupulous practices. Like a number of other federal regulatory agencies, the SEC was established in the 1930s--1934 to be exact. The impetus for its formation was to prevent investors from manipulating the stock market and to prevent other practices that contributed to the 1929 stock market crash. The SEC has all sorts of rules governing the stock market, including information disclosure, insider trading, speculation, and use of credit.

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Lesson 9: Macro Basics | Unit 4: Policies Page: 11 of 16

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Government tries to bring the economy closer to the macro goals of full employment, stability and growth, and to lessen the scarcity problem.
  • Economic policies are government actions designed to affect the economy to pursue the economic goals.
  • Stabilization policies (or counter-cyclical policies) are designed to limit economic instability and business cycles and avoid high rates of unemployment and inflation.
Key macroeconomic stabilization policies:
  • Fiscal policy is the use of government spending and taxes to stabilize the economy.
  • Monetary policy is the use of the amount of money in circulation to stabilize the economy.

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AVERAGE PHYSICAL PRODUCT

The quantity of total output produced per unit of a variable input, holding all other inputs fixed. Average physical product, usually abbreviated APP, is found by dividing total physical product by the quantity of the variable input. Average product, which more often goes by the shorter name average product (AP), is one of two measures derived from total physical product. The other is marginal physical product.

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