Changes in Economic and Business Cycles Flashcards
What is the rise and fall of economic activity relative to its long-term growth?
Business cycles
Is growth in economic activity stable?
No
What is the study of economy as a whole?
Macroeconomics
What is the total market value of all final goods and services?
GDP(Gross Domestic Product)
What GDP is measured in “today’s prices”?
Nonimal GDP
What GDP is measured in “base year” prices?
Real GDP
Calculation for Real GDP
(Nonimal GDP / GDP Deflator) x 100
What compare standards of living across countries or across time?
Real GDP per capita
What is the increase in real GDP per capita over time?
Economic growth
What phase involves an increase in employment and GDP?
Expansionary phase
What phase involves a decrease in profits and growth?
Peak phase
What phase involves a decrease in GDP and Employment?
Contractionary phase
What phase involves an increase in unemployment and makes people hesitant to make investments?
Trough phase
What phase involves an increase in GDP only?
Recovery phase
What is it called when the economy is below long-term avg. growth for two consecutive quarters?
Recession
What is a servere recession?
Depression
What type of indicators appear before the fact?
Leading indicators
What type of indicators appear after the fact?
Lagging indicators
A change in price causes a change in?
Quantity demanded and quantity supplied
A change in aggregate demand and aggregate supplies causes a change in?
Price level
Is aggregate demand sloped downward or upward?
Downward
Is aggregate supply sloping upward or downward?
Upward
Which way does long-run aggregate supply line run?
Vertical
What type of GDP is when the level of real GDP that the economy would produce if its resources were fully employed?
Potential GDP
