Terms : Hide Images
| 9472463861 | nominal/current GDP/GDP | the total value of all new goods and services produced in an economy during a specified period of time the general without change in the price level (inflation or deflation) being taken into account. It includes spending by consumers (C) + businesses (I) + the government (G) + foreigners (X) (net exports: exports-imports) |  | 0 |
| 9472463862 | real GDP (Y)/real output/output of production | a country's GDP that is adjusted to take into account the general change in prices (inflation and deflation) over time (from year to year) |  | 1 |
| 9472463863 | real GDP (Y) per capita | the average production per person in a country; a country's real GDP divided by the number of people in the country's population |  | 2 |
| 9472463864 | price level | the measurement of current prices of goods and services produced in the economy in a specific region or country at a specific time |  | 3 |
| 9472463865 | annual growth rate of real GDP (Y) per capita | the percentage increase in the real GDP per capita in a country each year from the previous year |  | 4 |
| 9472463866 | economic fluctuation/business cycles | small increases or decreases in a country's real GDP (Y) above or below the diagonal potential GDP line |  | 5 |
| 9472463867 | potential GDP | the straight and angled upward trend line in real GDP (Y); it represents the long-run tendency of the economy in a country to grow |  | 6 |
| 9472463868 | recession | a situation where the real GDP (Y) in a country is lower than the potential GDP at the full employment level; the economy operates below the full employment level; when the decline lasts for 6 or more months |  | 7 |
| 9472463869 | real income | income adjusted for changes in prices (inflation or deflation) | 8 | |
| 9472463870 | peak | the highest point in an economy before the start of a recession |  | 9 |
| 9472463871 | expansion | the period between recessions in an economy, from the trough to the next peak | | 10 |
| 9472463872 | trough | the lowest point in an economy at the end of a recession and before the recovery and expansion | | 11 |
| 9472463873 | recovery | the early part of an expansion in an economy after a trough | | 12 |
| 9472463874 | short-run (SR) economic growth rate | the percentage increase in a country's real GDP (Y) each year from the previous year |  | 13 |
| 9472463875 | long-run (LR) economic growth rate | the percentage increase in a country's real GDP (Y) each year over the long-run (4-5 years and beyond) | | 14 |
| 9472463876 | unemployment rate | a percentage; the number of unemployed people in a country divided by the number in the labor force; the labor force consists of those who are at least 16 and either working or looking for work |  | 15 |
| 9472463877 | full employment | unemployment around 3-5% in a country; not everyone has a job, but there are acceptable reasons why, like those who lost a job or those getting retrained to get another one; during full employment, all available resources are being used in an economy |  | 16 |
| 9472463878 | inflation | a situation where the real GDP (Y) in a country is more than the potential GDP at the full employment level; the economy operates above the full employment level |  | 17 |
| 9472463879 | inflation rate | the percentage increase in the average price level of all goods and services in a country from one year to the next |  | 18 |
| 9472463880 | demand-pull inflation | when inflation is caused by an excess of aggregate demand (AD) vs. supply, (AS), like after natural disasters occur; demand pulls inflation up |  | 19 |
| 9472463881 | sticky price | a price for goods or services that does not respond immediately to changing economic conditions | 20 | |
| 9472463882 | cost-push inflation | inflation caused by an increase in prices of inputs like labor, raw material, etc.; the cost of inputs push inflation up |  | 21 |
| 9472463883 | deflation | when the average price (P) level falls | 22 | |
| 9472463884 | interest rate | the amount that lenders charge when they lend money, expressed as a percentage of the amount loaned |  | 23 |
| 9472463885 | fixed interest rate | an interest rate that does not change; whatever the rate is at the start of the loan is the same rate at the end | 24 | |
| 9472463886 | nominal interest rate | the interest rate on a loan, making no adjustments for changes in the price level (inflation or deflation) |  | 25 |
| 9472463887 | real interest rate | the nominal interest rate minus the inflation rate; a loan at 6% with inflation at 20% gives a real interest rate of -14%, |  | 26 |
| 9472463888 | federal funds rate | the short-term interest rate banks charge other banks on overnight loans; this rate can be impacted up or down by the Federal Reserve (the "Fed") but them buying or selling bonds |  | 27 |
| 9472463889 | short-run aggregate supply (SRAS) | all of the goods and services produced in the short-run (up to one year out) by all of the firms in an economy using the available labor, capital, and technology; the curve is sloped to the right |  | 28 |
| 9472463890 | short-run equilibrium | short-run (SR) equilibrium is a state where aggregate supply (AS) equals aggregate demand (AD) in the short-run (SR) (less than 1 year) |  | 29 |
| 9472463891 | long-run aggregate supply (LRAS) | all of the goods and services produced in the long-run (3-5 years out) by all of the firms in an economy using the available labor, capital, and technology; the curve is perfectly vertical; on this line an economy is at full employment, full output, and the natural rate of unemployment |  | 30 |
| 9472463892 | long-run equilibrium | long-run (LR) equilibrium is a state where long-run aggregate supply (LRAS) equals aggregate demand (AD) in the long-run (SR) (3-5 years and beyond); where real GDP (Y) equals potential GDP |  | 31 |
| 9472463893 | capital goods | goods created in order to produce other goods |  | 32 |
| 9472463894 | consumer goods | good created for consumer purchase |  | 33 |
| 9472463895 | aggregate demand (AD) | the total amount that consumers (C), businesses (I), the government (G), and foreigners (net exports (X) will spend on all goods and services in an economy | | 34 |
| 9472463896 | supply-side policies | economic policies made by Congress that aim to increase long-term economic growth; fiscal policies made by the government that concentrate on increasing the growth of potential GDP, which is the aggregate supply (AS) of the economy | 35 | |
| 9472463897 | fiscal policy | government policy concerning taxing, spending, and borrowing in a country |  | 36 |
| 9472463898 | demand-side policies | monetary policies made by the Fed that are used to influence economic fluctuations; policies that aim to influence aggregate demand (AD) in an economy |  | 37 |
| 9472463899 | monetary policy | Federal Reserve (Fed) policy concerning the money supply and the control of inflation in a country |  | 38 |
| 9472463900 | money supply | the total amount of currency (coin and paper money) and deposits in banks in a country |  | 39 |
| 9472463901 | expansionary monetary policy | when a country's central bank tries to increase the country's money supply and boost its economy by keeping interest rates low |  | 40 |
