AP Macro Unit 2 Flashcards

6018824129	Business cycle	The alteration between economic downturns and economic upturns	0
6018824130	Consumer price index	Measures the cost of the market basket of a typical urban American family	1
6018824131	Cost-push inflation	Inflation that is caused by a significant increase in the price of an input with economy-wide importance	2
6018824132	Cyclical unemployment	The deviation of the actual rate of unemployment from the natural rate	3
6018824133	Deflation	A falling overall price level	4
6018824134	Demand-pull inflation	Inflation that is caused by an increase in aggregate demand	5
6018824135	Exports	Goods and services sold to other countries	6
6018824136	Frictional unemployment	Unemployment due to the time workers spend in job search	7
6018824137	GDP deflator	100 times the ratio of nominal GDP and real GDP in that year	8
6018824138	Gross domestic product	The total value of all final goods and services produced in the economy during a given year	9
6018824139	Inflation	A rising overall price level	10
6018824140	Inflationary spiral	A continuous rise in prices that is sustained by the tendency of wage increases and cost increases to react on each other	11
6018824141	Natural rate of unemployment	An unemployment rate that arises from the effects of frictional plus structural unemployment	12
6018824142	Net exports	The difference between the value of exports and the value of imports	13
6018824143	Recession	A period of economic downturn when output and unemployment are falling	14
6018824144	Structural unemployment	Unemployment that results when workers lack the skills required for the available jobs, or there are more people seeking jobs in a labor market than there are jobs available at the current wage rate	15
6018824146	Expenditure approach	An approach to calculating GDP by adding up aggregate spending on domestically produced final goods and services in the economy--the sum of consumer spending, investment spending, government purchases of goods and services, and exports minus imports	16
6018824147	Discouraged workers	Nonworking people who are capable of working but have given up looking for a job due to the state of the job market	17
6018824148	Factor (resource) market	Where resources, especially capital and labor, are bought and sold	18
6018824149	Final goods	Goods and services sold to the final, or end, user	19
6018824150	Income approach	An approach to calculating GDP by adding up the total factor income earned by households from firms in the economy, including rent, wages, interest, and profit	20
6018824151	Imports	Goods and services purchased from other countries	21
6018824152	Intermediate goods	Goods and services bought from one firm by another firm to be used as inputs into the production of final goods and services	22
6018824153	Labor force	The number of people who are either actively employed for pay or unemployed and actively looking for work; the sum of employment and unemployment	23
6018824154	Market basket	A hypothetical set of consumer purchases of goods and services	24
6018824155	National income	Keep track of the flows of money among different sectors of the economy	25
6018824156	Nominal GDP	The total value of all final goods and services produced in the economy during a given year, calculated with the prices current in the year in which the output is produced	26
6018824157	Nominal interest rate	The interest rate actually paid for a loan	27
6018824158	Okun's law	Relationship that says that a 1% increase in unemployment causes a 2% fall in GDP	28
6018824159	Peak	A point in the business cycle where the real GDP has reached a temporary maximum	29
6018824160	Product market	Where goods and services are bought and sold	30
6018824161	Real GDP	The total value of all final goods and services produced in the economy during a given year, calculated using the prices of a selected base year in order to remove the effects of price changes	31
6018824162	Real income	Income divided by the price level to adjust for the effects of inflation or deflation	32
6018824163	Real interest rate	The nominal interest rate minus the rate of inflation	33
6018824164	Real wage	The wage rate divided by the price level to adjust for the effects of inflation or deflation	34
6018824165	Recovery	Also known as the expansion period of a business cycle, output and employment rises and increases GDP	35
6018824166	Trough	Point in the business cycle where low output and high unemployment have reached their bottom	36
6018824167	Underemployed	Workers who would like to work more hours or who are overqualified for their jobs	37