Chapter 1: The Science of Macroeconomics Flashcards
1
Q
Macroeconomics
A
The forces that influence the economy as a whole
2
Q
Real GDP
A
Total income of everyone in the economy
3
Q
Inflation rate
A
How fast prices are rising
4
Q
Unemployment rate
A
The function of the labor force that is out of work
5
Q
Recessions
A
Short periods where the GDP falls
6
Q
Depressions
A
Long periods where the GDP falls
7
Q
Deflation
A
Periods of falling prices
8
Q
Models
A
What economists use to understand the world
9
Q
Endogenous Variables
A
Variables that a model tries to explain
10
Q
Exogenous Variables
A
Variables the model takes as a given
11
Q
Market Clearing
A
The assumption that the price of any good/service is found at the equilibrium
12
Q
Flexible
A
Prices can change
13
Q
Sticky
A
Prices can’t change
