Unit 2 Flashcards
(28 cards)
Business cycle
Expansion peak contraction and trough
Recession
Period of temporary economic decline defined by a fall in GDP
Economic depression
Period of sustained, long-term downturn in economic activity in one or more economies
Economic growth
Increase in the amount of goods produced per head of the population over a period of time
GDP
Gross domestic product
GDP=C+I+G+(x-n)
Intermediate goods
Product used to produce a final good or finished product
Final goods
Product ready for sale used by the consumer
Expenditure approach
Method for calculating GDP
Income approach
Real estate value method that uses the income the property generates to estimate fair value
Nonmarket transaction
Transactions covering goods or services that producers supply to others free or at very low prices
Government purchases
Spending by federal state or local agencies with the exception of debt and social security
Disposable personal income
After tax income
Labor force
Sum of the employed and the unemployed
Unemployment rate
Percentage of the labor force that is unemployed
Labor force participation rate
Proportion of the labor force that is either working or looking for work
Frictional unemployment
Unemployment existing due to people moving from one job to another
Structural unemployment
Unemployment resulting from industrial reorganization due to tech changes rather than changes in supply or demand
Cyclical unemployment
Impact on the economic recession or expansion on the total unemployment rate
Discouraged workers
People who are eligible and able but not actively seeking work
Full-employment real output
Production level when all available resources are used efficiently
Natural rate of unemployment
Rate of unemployment arising from all sources except fluctuations in aggregate demand
Consumer Price Index
Index of the variation in prices paid by typical consumers for retail goods
Inflation
Rising aggregate level
Deflation
Falling aggregate level
