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Definition: The structure of economic activity in a community, a region, a country, a group of countries, or the world.
Economy
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Definition: The market value of all final goods and services produced in the nation during a particular period, usually a year.
Gross Domestic Product (GDP)
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Definition: The market value of all final goods and services produced in the world during a given period, usually a year.
Gross World Product
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Definition: A variable that measures something over an interval of time, such as your income per week.
Flow Variable
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Definition: A variable that measures something at a particular point in time, such as the amount of money you have with you right now.
Stock Variable
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Definition: 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.
Mercantilism
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Definition: The rise and fall of economic activity relative to the long-term growth trend of the economy; also called business cycles.
Economic Fluctuations
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Definition: A period during which the economy's output increases.
Expansion
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Definition: A period during which the economy's output declines.
Contraction
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Definition: A sharp reduction in an economy's total output accompanied by high unemployment lasting more than a year.
Depression
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Definition: A sustained decline in the economy's total output lasting at least two consecutive quarters, or six months; an economic contraction.
Recession
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Definition: An increase in the economy's average price level.
Inflation
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Definition: 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.
Leading Economic Indicators
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Definition: Variables that reflect peaks and troughs in economic activity as they occur; examples include employment, personal income, and industrial production.
Coincident Economic Indicators
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Definition: Variables that follow,or trail, changes in overall economic activity; examples include the interest rate and the average duration of unemployment.
Lagging Economic Indicators
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Definition: A composite measure of all final goods and services produced in an economy during a given period; real GDP.
Aggregate Output
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Definition: The relationship between the economy's price level and aggregate output demanded, with other things constant.
Aggregate Demand
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Definition: A composite measure reflecting the prices of all goods and services in the economy relative to prices in a base year.
Price Level
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Definition: The economy's aggregate output measured in dollars of constant purchasing power.
Real Gross Domestic Product (Real GDP)
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Definition: A curve representing the relationship between the economy's price level and real GDP demanded per period, with other things constant.
Aggregate Demand Curve
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Definition: A curve representing the relationship between the economy's price level and real GDP supplied per period, with other things constant.
Aggregate Supply Curve
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Definition: A flow variable measuring the amount by which federal government outlays exceed federal government revenues in a particular period, usually a year.
Federal Budget Deficit
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Definition: Macroeconomic policy that focuses on shifting the aggregate demand curve as a way of promoting full employment and price stability.
Demand-Side Economics
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Definition: A contraction, or stagnation, of a nation's output accompanied by inflation in the price level.
Stagflation
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Definition: Macroeconomic policy that focuses on a rightward shift of the aggregate supply curve through tax cuts or other changes to increase production incentives.
Supply-Side Economics
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Definition: A stock variable that measures the net accumulation of annual federal deficits.
Federal Debt
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Definition: Real GDP divided by the population; the best measure of an economy's standard of living.
Real GDP per Capita
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