Ch. 12 Vocab Flashcards
(23 cards)
GDP measured in current prices
Nominal GDP
GDP expressed in constant, or unchanging, prices
Real GDP
The annual income earned by a nations firms and citizens
Gross national product
The loss of the value of capital equipment that results from normal wear and tear
Depreciation
The average of all prices in economy
Price level
The total amount of goods and services in the economy available at all possible price levels
Aggregate supply
The amount of goods and services in the economy that will be purchased at all possible price levels
Aggregate demand
The process of increasing the amount of capital per worker
Capital deepening
Income not used for consumption
Saving
The proportion of disposable income that is saved
Saving rate
An increase in efficiency gained by producing more output w/o using more inputs
Technological progress
Real GDP divided by the total population of a country
Real GDP per capita
A system economist use to collect and organize macroeconomic statistics on production, income, investment, and savings
National income accounting
A period of macroeconomic expansion followed by one of macroeconomic contraction
Business cycle
A period of economic growth as measured by a rise in real GDP
Expansion
A steady long term increase in real GDP
Economic growth
The height of an economic expansion, when real GDP stops rising
Peak
A period of economic decline marked by falling real GDP
Contraction
The lowest point of an economic contraction, when real GDP stops falling
Trough
A prolonged economic contraction
Recession
A recession that is especially long and severe
Depression
A decline in real GDP combined with a rise in the price level
Stagflation
A set of key economic variables that economists use to predict future trends in a business cycle
Leading indicators
