Model 2: Introduction To Macroeconomics Flashcards
Business cycle
The short-run Alternation between economic down turns, known as recessions, and economic upturns, known as expansions.
Depression
A very deep and prolonged downturn
Recession
Periods of economic downturn’s when output and employment are falling
Expansion
Period of economic upturns when output and employment are rising
Employment
The number of people currently employed in the economy
Unemployment
The number of people who are actively looking for work but aren’t currently employed
Labor force
The sum of employment and unemployment
Unemployment rate
The percentage of labor force that is unemployed
Output
The quantity of goods and services produced
Aggregate output
The economies total production of goods and services for a given time period
Inflation
A rising overall price level
Deflation
A falling overall price level
Priced stability
When the aggregate price level is changing only slowly
Economic growth
An increase in the maximum amount of goods and services and economy can produce
Model
A simplified representation used to better understand a real-life situation
