Chapter 12 Vocab Flashcards
(27 cards)
A system that collects macroeconomic statistics on production, income, investment, and savings
National income accounting
The dollar value of all final goods and services produced within a countries borders in a given year
Gross domestic product (GDP)
Goods used in the production of final goods
Intermediate goods
Goods that last for a relatively long time, such as refrigerators, cars, and DVD players
Durable
Goods
Goods that last a short period of time, such as food, light bulbs, and sneakers
Nondurable goods
GDP measured in current prices
Nominal GDP
GDP expressed in constant or unchanging prices
Real GDP
The annual income earned by US owned firms and US citizens
gross national product
The loss of value of capital equipment that results form normal wear and tear
Depreciation
The average of all prices in the 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
A period of macroeconomic expansion followed by a period of 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 in an economic contraction, when real GDP stops falling
Trough
A prolongs 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
Key economic variables that economists use to predict a new phase of a business cycle
Leading indicators
Real GDP divided by the total population
Real GDP per capita
Process of increasing the amount of capital per worker
Capital deepening
