Ch. 13 Economics Vocab. – Flashcards
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Business Cylcles
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Systematic changes in real GDP marked by alternating periods of expansion and contraction.
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Business Fluctuations
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Changes in real GDP marked by alternating periods of expansion and contraction that occur on an irregular basis.
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Recession
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Decline in real GDP lasting at least two quarters or more.
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Peak
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Point in time when real GDP stops expanding and begins to decline.
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Trough
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Point in time when real GDP stops declining and begins to expand.
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Expansion
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Period of uninterrupted growth of real GDP, recovery from recession.
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Trend Line
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Growth path the economy would follow if it were not interrupted by alternating periods of recession and recovery.
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Depression
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State of the economy with large number's of unemployed, declining real incomes, overcapacity in manufacturing plants, and general economic hardship.
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Depression Scrip
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Currency issued by towns, overcapacity in manufacturing plants, and general economic hardship.
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Leading Economic Indicator
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Statistical series that normally turns downs before the economy turns down or turns up before the economy turns up.
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Dow-Jones Industrial Average
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Statistical series of 30 representative stocks used to monitor price changes.
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Leading Economic Index (LEI)
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Monthly statistical series that use a combination of ten individual indicators to forecast changes in real GDP.
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Economic Model
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Macroeconomic expansion used to describe how the economy is expected to preform in the future.
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Inflation
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Rise in the general level of prices of goods and services.
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Deflation
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Decrease in the general level of the prices of goods and services.
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Price Index
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Statistical series used to measure changes in the price level over time.
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Consumer Price Index
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Index used to measure price changes for a market basket of frequently used consumer items.
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Market Basket
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Representative collection of goods and services used to compile a price index.
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Base Year
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Year Serving as a point of comparison for other years in a price index or other statistical measure.
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Creeping Inflation
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Relatively low rate of inflation, usually 1 to 3 percent annually.
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Hyperinflation
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Abnormal inflation in excess to 500 percent per year; last sage of monetary policy.
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Stageflation
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Combination of stagnant economic growth and inflation.
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Producer Price Index (PPI)
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Index used to measure prices received by domestic producers; formerly called the wholesale price index.
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Demand-Pull-Inflation
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Explanation that prices rise because all sectors of the economy try to but more goods and services than the economy can produce.
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Cost-Push-Inflation
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Explanation that rising input costs, especially energy and organized labor, drive up and cost of products for manufacturers and thus cause inflation.
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Creditors
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Persons or institutions to whom money is owed.
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Debtors
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Persons or institutions that owe money.
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Civilian Labor Force
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Non-institutionalized part of the population aged sixteen and over either working or looking for a job.
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Unemployed
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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 mad and effort to find a job during the past month.
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Unemployment Rate
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Ratio of unemployed individuals divided by total Number of persons in the civilian labor force, expressed as a percentage.
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Long-Term Unemployment
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Workers who have been unemployed for 27 weeks or more.
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Frictional Unemployment
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Unemployment caused by workers changing jobs or waiting to go to new ones.
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Structural Unemployment
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Unemployment caused by a fundamental change in the economy that reduces the demand for some workers.
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Outsourcing
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Hiring outside firms to perform non-core operations to lower operating costs.
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Technological Unemployment
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Unemployment caused by technological developments or automation that make some workers' skills obsolete.
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Cyclical Unemployment
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Unemployment directly related to swings in the business cycle.
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Seasonal Unemployment
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Unemployment caused by annual changes in the weather or other conditions that prevail at certain times of the year.
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GDP Gap
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Difference between what the economy can and does produce; annual opportunity cost of unemployed resources.
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Misery Index
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Unofficial statistic that is the sum of monthly inflation and the unemployment rate.
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Outsourcing
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Hiring outside firms to preform non-core operations to lower operating costs
