Economics Chapter 12 Vocabulary

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Gross Domestic Product:
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The dollar amount of all final goods and services produced within a country’s borders in a year.
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Nominal GDP:
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GDP measured in current dollars (current prices we pay for things).
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Real GDP:
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GDP expressed in constant or unchanging, prices
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Gross National Product:
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Is the total income earned by a nation’s permanent residents (called nationals)
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Price Level:
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the average of all prices in the economy
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Aggregate Supply:
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The total value of goods and services that all firms would produce in a specific period of time at various price levels.
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Aggregate Demand:
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The total amount of goods and services demanded in the economy at a given overall price level and in a given time period
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Expansion:
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period of uninterrupted growth of real GDP
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Economic Growth:
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This occurs when there is a sustained increase in a country’s productive capacity over time enabling nations to satisfy the needs and wants of its members over time. This is commonly measured by the percentage increase in real Gross Domestic Produce.
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Contraction:
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A period of recession in which GDP decreases.
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Recession:
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A period of declining economic growth.
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Depression:
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a deep, long-term decline in economic activity.
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Stagflation:
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a period of slow economic growth and high unemployment (stagnation) while prices rise (inflation)
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Leading Indicators:
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key economic variables that economists use to predict the new phase of a business cycle.

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