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Unit 2 Macro key ter
unit 2 key terms
| Question | Answer |
|---|---|
| Nominal GDP | the GDP measured in terms of the price level at the time of the measurement (unadjusted in inflation) |
| Real GDP | Real GDP: adusted for inflation; the gross domestic product in a year divided by the GDP price index for that yearthe index expressed as a decimal |
| Expenditures approach | the method that adds all expenditures made foor final goods and services to measure the gross domestic product |
| Intermediate goods | Products that are purchased for resale or further processing or manufacturing |
| Final Goods | Final goods and services that have been purchased for final use and not for resale or further processing or manufacturing |
| Price Index | An index number that shows how the weighted average price of a "market basket"of goods and changes over time |
| Cyclical Unemployment | A type of unemployment caused by insufficent total spending (or by insufficient aggregate demand) |
| Frictional Unemployment | A type of unemployment caused by workers voluntarily changing jobs and by temporary layoffs ; unemployed workers between jobs |
| Structual Unemployment | Unemployment of workers whose skills are not demanded by employers, who lack sufficient skills to obtain employment, or who cannot easily move to locations where jobs are avaiable |
| CPI | An index that measures the prices of a fixed "market basket" of some 300 goods and services bought by a "typical" consumer |
| Nominal Income | Nominal: the number of dollars recieved by an individual or group for its resources during some period of time |
| Real income | Real: the amount of goods and services that can be purchased with nominal income during some period of time;to the nominal income adjusted for inflation |
| Real Interest Rate | The interest rate expressed in dollars of constant value (adjusted for inflation) and equal to the nominal interest rate less expected rate of inflation |
| Nominal Interest Rate | the interest rate expressed in terms of annual amounts currently charged for interest and not adjusted for inflation |
| Inflation | A rise in the general level of prices in the economy |
| Natural Rate of Unemployment | The full employment rate;the unemployment rate occuring when there is no cyclical unemployment and the economy is achieveing its potential output; the unemployment rate at which actual inflation equals expected inflation |
Created by:
Pancho112