business cycle vocab – Flashcards
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aggregate demand
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the amount of goods and services in the economy that will be purchased at all possible price levels
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aggregate supply
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the total amount of goods and services in the economy available at all possible price levels
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business cycle
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a period of macroeconomic expansion followed by a period of contraction
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consumer price index (CPI)
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a price index determined by measuring the price of the standard group of goods meant to represent the typical "market basket" of a typical urban consumer measure of inflation as it affects the average consumer
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gross domestic product
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the total market value of all goods and services produced in a nation over a specific period of time
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economic growth
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occur when GDP grows, CPI remains at a level that increases profits without increasing inflation and the nation debt does not grow
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unemployment
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percentage of people who are looking for work ( the lack of jobs for willing workers)
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inflation
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increase in the average price of goods and services in an economy ( a rise in a general price)
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stagflation
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price increase, but economy does not grow a period of large price inflation combined with no output growth increasing unemployment and a recession
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contraction
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phase of the business cycle is a period in which real GDP is declining
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cyclical unemployment
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unemployment that is caused by a downturn in the business cycle
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deflation
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general decrease in the level is prices
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depression
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prolonged period of economic decline with large members of unemployment shrinking incomes, and general economic hardship
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expansion
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lasts until real GDP reaches the level of the previous peak
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expenditure approach
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is based on transaction made in the product market. the purchase include household expenditure (consumption) business expenditure or capital
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frictional expenditure
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unemployment caused by people changing jobs
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government deficit
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when a government spends more money than it make it
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income approach
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is based on a transaction made in the factor
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macroeconomics
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this is the study of an economy as a whole
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market value
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GDP uses market prices of goods and services for calculation. the use of market prices is one problem with the accuracy of GDP because people often buy at dis---- price
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national debt
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total amount of money a nation owes its creditors
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peak
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refers to the highest point of real GDP between the end of expansion and the beginning of an economic contraction
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recession
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a decline in a country is GDP for 2 or more successive quarters. it is usually characterized by a significant in economic activities
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recovery
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occur when real GDP becomes positive after a period of negative real GDP
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structural
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unemployment that is caused by changes in technology or reduced demand for certain products
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trough
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the lowest point of real GDP between the end of a contraction and the beginning of a recovery
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unemployment rate
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refers to the percentage of the civilian workforce who are available for a job but do not have one
