AP Economics Unit 3 Flashcards
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| 7663239368 | Gross Domestic Product (GDP) | the total value of all goods and services produced within a country during a given year. |  | 0 |
| 7663241749 | Net Domestic Product | gross domestic product minus depreciation |  | 1 |
| 7663244044 | Multiplier | the increase in equilibrium real GDP divided by the increase in autonomous expenditure |  | 2 |
| 7663244045 | Nominal GDP | the production of goods and services valued at current prices |  | 3 |
| 7663244046 | Real GDP | the value of final goods and services evaluated at base-year prices |  | 4 |
| 7663248510 | Price Index | a number that compares prices in one year with some earlier base year |  | 5 |
| 7663248511 | Business Cycle | Alternating periods of economic expansion and economic recession |  | 6 |
| 7663250988 | Unemployment Rate | the percentage of the nation's labor force that is unemployed *people not looking for a job are not counted towards unemployment rate |  | 7 |
| 7663250989 | Expected Rate of Return | return we expect on the investment use weighted average of the outcomes |  | 8 |
| 7663254994 | Frictional Unemployment | a type of unemployment caused by workers voluntarily changing jobs and by temporary layoffs; unemployed workers between jobs. Also called search and wait unemployment |  | 9 |
| 7663254995 | Structural Unemployment | unemployment of workers whose skills are not demanded by employers, who lack sufficient skill to obtain employment, or who cannot easily move to locations where jobs are available, last longer than frictional |  | 10 |
| 7663257536 | Cyclical Unemployment | unemployment that rises during economic downturns and falls when the economy improves |  | 11 |
| 7663257537 | Natural Rate of Unemployment | the normal rate of unemployment around which the unemployment rate fluctuates |  | 12 |
| 7663261056 | GDP Gap | Difference of actual and potential GDP occurs due to cyclical unemployment |  | 13 |
| 7663263568 | Okun's Law | for every 1% increase in unemployment, there is a 2% loss of potential GDP |  | 14 |
| 7663263569 | Demand-Pull Inflation | excess demand bids up the prices of the limited output |  | 15 |
| 7663268382 | Cost-Push Inflation | inflation resulting from an increase in the cost of production |  | 16 |
| 7663273723 | Rule of 70 | time to double = 70/R (R= rate of growth) |  | 17 |
| 7663273724 | APC | consumption/income |  | 18 |
| 7663273725 | APS | saving / income |  | 19 |
| 7663273726 | MPC | change in consumption/change in income |  | 20 |
| 7663276249 | MPS | change in savings/change in income |  | 21 |