The structure of economic activity in a community, a region, a country a group of countries, or the world
Define Gross Domestic Product (GDP)
The market value of all final goods and services produced in the nation during a particular period, usually a year
What is gross world product?
The market value of all final goods and services produced in the world during a given period, usually a year
Define flow variable
A measure of something over an interval of time, such as you spending per week
Define StocK Variable
A measure of something at a particular point in time, such as the amount of money you have with you right meow
The incorrect theory that a nation's economic objective should be to accumulate precious metals in the public treasury; this theory prompted trade barriers to cut imports, but other countries retaliated, reducing trade and the gains from specialization....phew!!!
A period during which the economy grows as reflected by rising output, employment, income and other aggregate measures
A period during which the economy declines as reflected by falling output, employment, income, and other aggregate measures
A severe and prolonged reduction in economic activity as occurred during the 1930's
A period of decline in economic activity lasting more than a few months, as reflected by falling output, employment, income, and other aggregate measures
An increase in the economy's average price level
Trough is a
What are leading economic indicators
Variables that predict, or lead to, a recession or recovery; examples include consumer confidence, stock market prices, business investment, and big-ticket purchases, such as automobiles and homes. =:0
Coincident economic indicators are
Variables that reflect peaks and troughs in economic activity as they occur; examples include employment, personal income, and industrial production
Lagging economic indicators are
Variables that follow, or trail, changes in overall economic activity; examples include the interest rate and the average duration of unemployment
Aggregate output is
A composite measure of all final goods and services produced in an economy during a given period; real GDP
Aggregate Demand is
The relationship between the economy's price level and aggregate output demanded, with other things constant
Price Level is
A composite measure reflecting the prices of all goods and services in the economy relative to prices in a base year
An index number is
a reference number, comparing average prices that year with average prices in some base, or reference year
real gross domestic product (GDP) is
The economy's aggregate output measured in dollars of constant purchasing power
aggregate demand curve is
A curve representing the relationship between the economy's price level and real GDP demanded per period, with other things constant
aggregate supply curve is
A curve representing the relationship between the economy's price level and real GDP supplied per period, with other things constant
federal budget deficit is
A flow variable measuring the amount by which federal government outlays exceed federal government revenues in a particular period, usually a year
demand-side economics is
A macroeconomic policy that focuses on shifting the aggregate demand curve as a way of promoting full employment and price stability; John Maynard Keynes
A contraction, or stagnation, of a nation's output accompanied by inflation in the price level
Supply-side Economics is
Macroeconomic policy that focuses on a rightward shift of the aggregate supply curve through tax cuts or other changes to increase production incentives
federal debt is
A stock variable that measures the net accumulation of annual federal deficits
real GDP per capita is
Real GDP divided by the population; the best measure of an economy's standard of living
Which lasts longer expansion or contraction?
Expansion lasts longer ;}
What does the price index measure?
1) Shows how the economy's price level changes over time
2) is used to figure out real GDP each year
What are the factors held constant along a given aggregate demand curve?
Price levels in other countries as well as the exchange rate between the U.S. dollar and foreign currencies.
What are the assumed constants in an aggregate supply curve?
1) resource prices
2) the state of technology
3) the rules of the game that provide production incentives, such as patents, tax rates, and business practices
What does the price index show?
(1) shows how the economy's price level changes over time (2) is used to figure out real GDP each year