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Econ - Topic 7 Vocab
Econ - Topic 7 Vocabulary
| Term | Definition |
|---|---|
| national income accounting | a system economists use to collect and organize macroeconomic statistics on production, income, investment, and savings |
| gross domestic product (GDP) | the total value of all final goods and services produced in a country in a given year |
| intermediate goods | products used in the production of final goods |
| nominal GDP | GDP measured in current prices |
| real GDP | GDP expressed in constant, or unchanging, prices |
| gross national product (GNP) | the annual income earned by a nation’s companies and people |
| price level | the average of all prices in an economy |
| aggregate supply | the total amount of goods and services in the economy available at all possible price levels |
| aggregate demand | the amount of goods and services in the economy that will be purchased at all possible price levels |
| business cycle | a period of macroeconomic expansion, or growth, followed by a period of contraction, or decline |
| expansion | a period of economic growth as measured by a rise in real GDP |
| peak | the height of an economic expansion |
| contraction | an economic decline marked by falling real GDP |
| trough | the lowest point in an economic contraction |
| recession | a prolonged economic contraction |
| depression | a deep recession with features such as high unemployment and low economic output |
| real GDP per capita | real GDP divided by the total population of a country |
| capital deepening | the process of increasing the amount of capital per worker |
| saving | income not used for consumption |
| savings rate | the proportion of disposable income that is saved |
| technological progress | an increase in efficiency gained by producing more output without using more inputs |
| frictional unemployment | type of unemployment that occurs when people take time to find a job |
| seasonal unemployment | type of unemployment that occurs as a result of harvest schedules, vacations, or when industries make seasonal shifts in their production schedules |
| structural unemployment | type of unemployment that occurs when workers’ skills do not match those needed for the jobs available |
| cyclical unemployment | unemployment that rises during economic downturns and falls when the economy improves |
| globalization | the increasingly tight interconnection of producers, consumers, and financial systems around the world |
| unemployment rate | the percentage of a nation’s labor force that is unemployed |
| full employment | the level of employment reached when there is no cyclical unemployment |
| underemployed | working at a job for which one is overqualified, or working part time when full-time work is desired |
| inflation | a general increase in prices across an economy |
| purchasing power | the ability to purchase goods and services |
| price index | a measurement that shows how the average price of a standard group of goods changes over time |
| Consumer Price Index (CPI) | a price index determined by measuring the price of a standard group of goods meant to represent the “market basket” of a typical urban consumer |
| market basket | a representative collection of goods and services |
| inflation rate | the percentage rate of change in price level over time |
| quantity theory | the theory that too much money in the economy causes inflation |
| wage-price spiral | the process by which rising wages cause higher prices, and higher prices cause higher wages |
| fixed income | income that does not increase even when prices go up |
| deflation | a sustained drop in the price level |
| poverty threshold | an income level below that which is needed to support families or households |
| poverty rate | the percentage of people who live in households with income below the official poverty line |
| income distribution | the way in which a nation’s total income is distributed among its population |
| enterprise zones | an area where businesses can locate free of certain local, state, and federal taxes and restrictions |
| cash transfers | direct payments of money by the government to people who are poor, disabled, or retired |
Created by:
brittlloyd
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