Term
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Definition
| Shows the quantity of domestic product that is demanded at each possible value of the price level. |
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Term
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Definition
| Shows the quantity of domestic product that is supplied at each possible value of the price level. |
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Term
| What happens when Aggregate Demand shifts out? |
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Definition
| Increase in output (growth of real GDP) and an increase in price level (inflation) |
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Term
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Definition
The growth rate of prices over time.
- The formula is on page 3 of ch. 5 notes |
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Term
| What happens when there is a shift back in aggregate demand? |
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Definition
| A fall in price level and a fall in real output |
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Term
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Definition
| period of decline in real output (usually considered to be a minimum of two quarters) |
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Term
| Gross Domestic Product (GDP) |
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Definition
| The sum of the money valus of all final GOODS and SERVICES PRODUCED in the domestic economy and sold on ORGANIZED MARKETS during a specified period of time. |
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Term
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Definition
Calculated by valuing all outputs at current prices
Ex. If all prices double tomorrow, nominal GDP will double, but real output is UNCHANGED |
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Term
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Definition
calculated by valuing outputs of different years at COMMON PRICES. Therefore, the growth rate of real GDP is superior to teh growth rate of nominal GDP for measuring changes in total production.
-The formula is on page 4 of ch. 5 notes |
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Term
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Definition
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Term
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Definition
a good purchased for resale or for use in producing another good.
Ex. Flour and eggs are intermeidate inputs into bread. where the bread is sold in the market, only count the bread |
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Term
| What are some Limitations of GDP |
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Definition
1.Doesn't count Black market/illegal activity
2. Cash transactions are not counted
Ex. Paying a guy cash to paint house
3. Housework and do it yourself repairs are not counted. but the goods you purchase do count.
4. Leisure time is not counted
5. bad sometimes get counted
Ex. tornado damange, the flu (GDP went up for these, doesn't mean we are better off)
6. Enviromental cost are netted out of GDP |
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Term
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Definition
| The name given to government programs designed to prevent or shorten recessions and to counteract inflation (i.e to stablize prices) |
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Term
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Definition
| Wrote The General Theory of Employment interest and Prices in 1936, in some ways he started the field of macroeconomics. He emphasized the need for stabilization poilcy by the government. |
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Term
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Definition
| The real output that the economy would produce if its labor and other resources ere fully employed |
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Term
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Definition
| The amount of output a worker turns out in an hour (or week or year) of labor. measured as GDP/ Total hours worked |
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Term
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Definition
Real Gdp/ Population
a measure of living standards within a country subject. |
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Term
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Definition
| the number of people having or seeking jobs |
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Term
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Definition
| those with jobs even if only a part timer who would like to work full time. |
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Term
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Definition
| you must be actively seeking work or temporarily laid off from a job you expect to return to. Otherwise people are considered to be out of the labor force. Among those counted as being out of the labor force may be discouraged workers. |
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Term
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Definition
| Unemployment that is due to normal turnover in the labor market. It includes people who are temporarily between jobs because they are moving or changing occupations, or are unemployed for similar reasons. |
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Term
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Definition
Workers who have lost their jobs because they have been displaced by automation, because their skills are no longer in demand, because of changes in the productive structure of the economy, or for similar reasons.
-more serious, more painful, very normal of capital society. |
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Term
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Definition
| Unemployment that is attributable to a decline in the economy's total production. Cyclical unemployment rises during a RECESSION and falls as prosperity returns. |
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Term
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Definition
| the wage rate adjusted for the price level. It indicates the volume of goods and services the money wage will buy. |
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Term
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Definition
| percentage by which the money the borrower pays back exceeds the money that she borrowed, making no adjustment for any fall in the purchasing power of this money that results from inflation. |
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Term
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Definition
| the expected percentage increase in real purchasing power that the borrower pays to the lender for the privilege of borrowing. |
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Term
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Definition
| the difference between the price at which an asset is sold and the price at which it was bought. |
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Term
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Definition
| Legal limits on the maximum permissible interest rate for a particular type of loan. These ratesare set in nominal terms and this can be a problem during a period of high inflation. |
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