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Honors Econ Unit 3
Term | Definition |
---|---|
Gross Domestic Product | monetary value of all final goods, services, and structures produced within a country's borders during a one-year period. |
Intermediate Products | Products that are components of other final products already included in the GDP |
Real GDP | Gross Domestic Product after adjustments for inflation; same as GDP in constant dollars |
Nominal GDP | Gross domestic product measured in current prices, unadjusted for inflation |
GNP | The market value of goods and services produced by labor and property supplied by U.S. residents |
Net-Exports of Goods and Services | Net expenditures by the output-expenditure model's foreign sector; equal to total exports less total imports |
Business Cycle | Systematic changes in real GDP marked by alternating periods of expansion and contraction |
Recession | Decline in real GDP lasting at least two quarters or more |
Peak | Point in time where real GDP stops expanding and begins to decline |
Trough | Point in time when real GDP stops declining and begins to expand |
Expansion | Period of uninterrupted growth of real GDP, industrial production, real income, and employment lasting for several years or more; recovery from recession |
Depression | State of the economy with large numbers of unemployed, declining real incomes, overcapacity in manufacturing plants, and general economic hardship |
Inflation | Sustained rise in the general level of prices of goods and services |
Deflation | Sustained decrease in the general level of the prices of goods and services |
Price Index | Statistical series used to measure changes in the price level over time |
Consumer Price Index | used to measure price changes for a market basket of frequently used consumer items |
Hyperinflation | Abnormal inflation in excess of 500 percent per year; last stage of monetary collapse |
Stagflation | Combination of stagnant economic growth and inflation |
Unemployed | State of working for less than one hour per week for pay or profit in a non-family owned business, while being available and having made an effort to find a job during the past month |
Labor Force | The pool of human beings either in employment or in unemployment |
Frictional Unemployment | Unemployment caused by workers changing jobs or waiting to go to new ones |
Structural Unemployment | Unemployment caused by a fundamental change in the economy that reduces demand for some workers |
Cyclical Unemployment | Unemployment directly related to swings in the business cycle |
Seasonal Unemployment | Unemployment caused by annual changes in weather or other conditions that prevail at certain times of the year |
Member Bank | Bank belonging to the Federal Reserve System |
Require Reserve Ratio | The portion of reservable liabilities that commercial banks must hold onto, rather than lend out or invest |
Excess Reserves | Financial institution's cash, currency, and reserves in excess of required reserves; potential source of new loans |
Monetary Policy | Actions by the Federal Reserve System to expand or contract the money supply to affect the cost and availability of credit |
Interest Rate | The price of credit to a borrower |
Open Market Operations | Monetary policy in the form of U.S. Treasury bills, or notes, or bond sales and purchases by the Fed |
Discount Rate | Interest rate that the federal reserve system charges on loans to the nation's financial institutions |
Prime Rate | Best or lowest interest rate commercial banks charge their customers |
Federal Reserve System | Privately owned, publicly controlled, central bank of the United States |
IORB | Interest the Fed pays banks for money held at the Fed |