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Economics
Chapter 12 -13 Vocab
| Question | Answer |
|---|---|
| National income accounting | a system economists use to collect and organize maroeconomic statistics on production, income, investment, and savings. |
| Gross domestic product | the dollar value of all final goods and services produced within a country’s borders in a given year |
| Intermediate goods | products used in the production of final goods |
| Durable goods | those goods that last for a relatively long time, such as refrigerators, cars, and DVD players. |
| Nondurable goods | those goods that last a short period of time, such as food, light bulbs, and sneakers |
| Nominal GDP | GDP measured in current prices |
| Real GRP | GDP expressed in constant, or unchanging prices |
| Gross national product | the annual income earned by a nation’s firms and citizens |
| Depreciation | the loss of the value of capital equipment that results from normal wear and tear |
| Price level | the average of all prices in the economy |
| Aggregate supply | the total amount of goods and services in the economy available at all possible price levels |
| Aggregate demand | the total amount of goods and services in the economy that will be purchased at all possible price levels |
| Business cycle | a period of macroeconomic expansion followed by one of macroeconomic contraction |
| Expansion | a period of economic growth as measured by a rise in real GDP |
| Economic growth | a steady, long-term increase in real GDP |
| Peak | the height of an economic expansion, when real GDP stops rising |
| Contraction | a period of economic decline marked by falling real GDP |
| Trough | the lowest point of an economic contraction, when real GDP stops falling |
| Nondurable goods | a prolonged economic contraction |
| Depression | a recession that is especially long and severe |
| Stagflation | a decline in real GDP combined with a rise in the price level |
| Leading indicatiors | a set of key economic variables that economists use to predict future trends in a business cycle |
| 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 |
| Structural unemployment | type of unemployment that occurs when workers' skills do not match those needed for the jobs available |
| Globalization | the shift from local to global markets as countries seek foreign trade and investment |
| Seasonal unemployment | type of unemployment that occurs as a result of harvest schedules, vacations, or when industries make seasonal shifts in their production schedule |
| Cyclical unemployment | unemployment that rises during economic downturns and falls when the economy improves |
| Unemployment rate | the percentage of the 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 over qualified or working part-time when full-time work is desired |
| Discouraged worker | someone who wants a job but has given up looking |
| 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 | 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 |
| Core inflation rate | the rate of inflation excluding the effects of food and energy prices |
| Hyperinflation | inflation that is out of control |
| Quantity theory | the theory that too much money in the economy causes inflation |
| Wage-price spiral | process by which rising wages cause higher prices, and higher prices cause higher wages |
| Fixed income | income that doesn't increase even when prices go up |
| Deflation | a sustained drop in the price level |
| Poverty threshold | the income level below which income is insufficient to support a family or household |
| Poverty rate | the percentage of people who live in households with income below the official poverty threshold |
| Income distribution | the way in which a nation's total income is distributed among its population |
| Food stamp program | government program that helps low-income recipients to buy food |
| Lorenz Curve | the curve that illustrates income distribution |
| Enterprise zone | area where businesses can locate free of certain state, local, and federal taxes and restrictions |
| Block grant | federal funds given to the states in lump sums |
| Workforce | a program requiring work in exchange for temporary government assistance |
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