CLEP Unit 2 Terms

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  1. business cycle
    alternating periods of growth and decline in an economy's GDP
  2. inflation
    rate or percent at which prices go up
  3. Gross Domestic Product (GDP)
    total amount of value of goods and services produced in a country in 1 year
  4. Nominal GDP
    does not consider inflation
  5. Real GDP
    inflation is factored in
  6. Consumer Price Index (CPI)
    measures the change in prices of normal household goods
  7. GDP Deflator
    takes into account inflation
  8. Aggregate Supply
    total amount of goods available in the USA
  9. Aggregate Demand
    total amount of goods desired in the USA
  10. Macoequilibrium
    aggregate supply and aggregate demand are balanced
  11. Demand-Pull Inflation
    (prosperity) too much money and demand is high
  12. Cost-Push Inflation
    limited supply, suppliers raise prices
  13. Stagnation
    a period of stagnating real GDP, inflatoin, and relatively high levels of unemployment
  14. unemployment
    people who want a job but can't find one
  15. circular flow of goods, services, and resources
    the movement of goods and services from firms to households, and of resources from households to firms
  16. circluar flow of money
    the movement of income in the form of resource payments from firms to households, and of income in the form of revenue from households to firms
  17. final good vs. intermediate good
    • final: goods purchased for final use - not resale
    • intermediate: goods used to produce other goods
  18. durable good vs. nondurable good
    • durable: goods expected to last at least 1 yr
    • nondurable: expecited to last less than a yr
  19. services
    productive activites that are instantaneously consumed
  20. national income
    the sum of all payments made to resource owners for the use of their resources
  21. gross national product (GNP)
    total amount of value of goods and services produced in a country in 1 yr
  22. capital depreciation
    value of existing capital to labor
  23. Net Domestic Product (NDP)
    GDP minus capital depreciation
  24. personal income
    national income, plus income received but not earned, minus income earned but not received
Card Set
CLEP Unit 2 Terms
CLEP Macroecon unit 2 terms
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