Term
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Definition
| deals with the economy as a whole. Focuses on the determinants of total national income, deals with aggregate consumption and investment, and looks at the overall level of prices instead of individual prices |
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Term
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Definition
| examines the functioning of individual industries and the behavior of individual decision making units, firms and households |
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Term
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Definition
| the behavior of all households and firms together |
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Term
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Definition
| prices that do not always adjust rapidly to maintain equality between quantity supplied and quantity demanded |
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Term
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Definition
| the cycle of short term ups and downs in the economy |
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Term
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Definition
| the total quantity of goods and services produced in an economy in a given period |
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Term
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Definition
| a period during which aggregate output declines, typically two quarters |
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Term
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Definition
| a prolonged and deep recession |
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Term
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Definition
| the period in the business cycle from a trough up to a peak during which output and employment grow |
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Term
| contraction, recession, or slump |
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Definition
| the period in the business cycle from a peak down to a trough during which output and employment fall |
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Term
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Definition
| the percentage of labor force that is unemployed |
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Term
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Definition
| an increase in the overall price level |
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Term
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Definition
| a period of very rapid increases in the overall price level |
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Term
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Definition
| a decrease in the overall price level |
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Term
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Definition
| diagram showing the income received and payments made by each sector of the economy |
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Term
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Definition
| cash payments made by the government to people who do not supply goods, services, or labor in exchange for these payments (social security, welfare, vererans' benefits) |
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Term
| treasury bonds, notes and bills |
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Definition
| promissory notes issued by the federal government when it borrows money |
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Term
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Definition
| promissory notes issued by firms when they borrow money |
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Term
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Definition
| financial instruments that give to the holder a share in the firm's ownership and therefore the right to share in the firm's profits |
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Term
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Definition
| the portion of a firm's profits that the firm pays out each period to its shareholders |
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Term
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Definition
| government policies concerning taxes and spending |
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Term
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Definition
| the tools used by the federal reserve to control the quantity of money, which in turn affects interest rates |
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Term
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Definition
| the phrase used by walter heller to refer to the government's role in regulating inflation and unemployment |
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Term
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Definition
| a situation of both high inflation and high unemployment |
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Term
| national income and product accounts |
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Definition
| data collected and published by the government describing the various components of national income and output in the economy |
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Term
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Definition
| the total market value of all final goods and services produced within a given period by factors of production located within a country |
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Term
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Definition
| goods and services produced for final use |
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Term
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Definition
| goods that are produced by one firm for usein further processing by another firm |
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Term
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Definition
| the difference b/t the value of goods as they leave a stage of production and the cost of the goods as they entered that stage |
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Term
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Definition
| the total market value of all final goods and services produced within a given period by factors of production owned by a country's citizens, regardless of where the output is produced |
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Term
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Definition
| a method of computing GDP that measures the total amount spent on all final goods and services during a given period |
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Term
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Definition
| a method of computing GDP that measures income-- wages, rents, interest, and profits-- recieved by all factors of production in producing final goods and services |
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Term
| personal consumption expenditures |
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Definition
| expenditures by consumers on goods and services |
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Term
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Definition
| goods that last a relatively long time, such as cars and household appliances |
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Term
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Definition
| goods that are used up fairly quickly, such as food and clothing |
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Term
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Definition
| things we buy that do not involve the production of physical things |
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Term
| gross private domestic investment |
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Definition
| total investment in capital-- that is, the purchase of new housing, plants, equipment, and inventory by the private sector |
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Term
| nonresidential investment |
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Definition
| expenditures by firms for machines, tools, plants, |
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Term
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Definition
| expenditures by households and firms on new houses and apartment buildings |
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Term
| change in business inventories |
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Definition
| the amount by which firms' inventories change during a period |
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Term
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Definition
| the amount by which an asset's value falls in a given period |
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Term
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Definition
| the total value of all newly produced capital goods produced in a given period |
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Term
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Definition
| gross investment minus depreciation |
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Term
| government consumption and gross investment (G) |
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Definition
| expenditures by federal, state, and local governments for final goods and services |
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Term
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Definition
| the difference between exports and imports |
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Term
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Definition
| the total income earned by the factors of production owned by a country's citizens |
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Term
| compensation of employees |
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Definition
| include wages, salaries, and various supplements--employer contributions to social insurance and pension funds |
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Term
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Definition
| the income of unincorporated businesses |
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Term
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Definition
| the interest paid by business |
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Term
| indirect taxes minus subsidies |
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Definition
| taxes such as sales taxes, customs duties, and license fees less subsidies that pay for which it receives no goods or services in return |
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Term
| surplus of government enterprises |
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Definition
| income of government enterprises |
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Term
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Definition
| gross national product minus depreciation. nation's total product minus what is required to maintain the value of its capital stock |
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Term
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Definition
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Term
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Definition
| the total income of households |
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Term
| disposable income/after tax income |
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Definition
| personal income minus personal income taxes |
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Term
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Definition
| amount of disposable income that is left after total personal spending |
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Term
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Definition
| gross domestic product measured in current dollars |
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Term
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Definition
| the importance attached to an item within a group of items |
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Term
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Definition
| GNP converted into dollars using an average of currency exchange rates over several years adjusted for rates of inflation |
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Term
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Definition
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Term
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Definition
| labor force + not in labor force |
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Term
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Definition
| unemployed/employed + unemployed |
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Term
| labor force participation rate = |
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Definition
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Term
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Definition
| unemployment due to the normal turnover in the labor market |
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Term
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Definition
| portion of unemployment that is due to changes in the structure of the economy that result in a significant loss of jobs in certain industries |
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Term
| natural rate of unemployment |
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Definition
| occurs as a normal part of the functioning of the economy. sometimes taken as the sum of frictional and structural unemployment rates |
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Term
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Definition
| unemployment that is above frictional plus structural unemployment |
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Term
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Definition
| a price index computed each month by the Bureau of Labor Statistics using a bundle that is meant to represent the "market basket" purchased monthly by the typical urban consumer |
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Term
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Definition
| measures of prices that producers receive for products at all stages in the production process |
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Term
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Definition
| the difference b/t the interest rate on a loan and the inflation rate |
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Term
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Definition
| the growth rate of the output of the entire economy |
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Term
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Definition
| the growth rate of output per person in the economy |
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Term
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Definition
| the growth rate of output per worker |
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