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Macroeconomics Chapter 22-23
Vocabulary Terms
20
Economics
Undergraduate 1
03/13/2012

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Term
Aggregate demand
Definition
The total amount that all consumers, business firms, government agencies, and foreigners spend on final goods and services
Term
Aggregate supply
Definition
The total supply of goods and services that firms in a national economy plan on selling during a specific time period
Term
Inflation
Definition
A sustained increase in the general price level
Term
Recession
Definition
A period of time during which the total output of the economy declines
Term
Nominal GDP
Definition
Calculated by valuing all outputs at current prices
Term
Real GDP
Definition
Calculated by valuing outputs of different years at common prices.
Term
Fiscal Policy
Definition
The government's fiscal policy is its plan for spending and taxation
Term
Monetary Policy
Definition
Refers to actions taken by the Federal Reserve to influence aggregate demand by changing interest rates
Term
Unemployment (4 forms)
Definition
  1. Seasonal
  2. Frictional
  3. Structual
  4. Cyclical
Term
Economic Growth
Definition
The increase in the amount of the goods and services produced by an economy over time
Term
Full Employment
Definition
A situation in which everyone who is willing and able to work can find a job
Term
Nominal Rate of Interest
Definition
The percentage by which the money the borrower pays back exceeds the money that was borrowed, making no adjustment for any decline in purchasing power of this money that results from inflation
Term
Real Rate of Interest
Definition
The percentage increase in purchasing power that the borrower pays to the lender for the priviledge of borrowing
Term
Discourage workers
Definition
An unemployed person who gives up looing for work and is therefore no longer counted as part of the labor force
Term
Consumer Price Index
Definition
Measured by pricing the items on a list representative of a typical urban household budget
Term
Season unemployment
Definition
employment in some areas is weather/calendar dependent
*Lawnmower*
Term
Frictional unemployment
Definition
people have skills, but they need time/location to find work
*Computer Engineers?*
Term
Structual Unemployment
Definition
people lack skills for employment will need new skills
*Calculator*
Term
Cyclical Unemployment
Definition
skills sets are employable but economic conditions may result in temporary unemployment
*GM salespeople*
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