A sustained rose in the general price level of goods and services
Two or more successive quarters in which the economy shrinks instead of grows
The inability of those who are in the labor force to find a job; defined as the total number of those in the labor force actively looking for a job but unable to find one.
An arbitrary level of unemployment that corresponds to "normal" friction in the labor market.
Consumer Price Index (CPI)
A measure of the change in price over time of a specific group of goods and services used by the average household
The federal government use of taxation and spending policies to affect overall business activity
A school of economic thought that tends to favor active federal government policymaking to stabilize economy-wide fluctuation, usually by implementing discretionary fiscal policy
Government expenditures that exceed receipts
Wage and Price Controls
Government-imposed controls on the maximum prices that may be charged for specific goods and services, plus controls on permissible wage increases
Automatic, or Built-In Stabilizers
Certain federal programs that cause changes in national income during economic flunctuations without the action of Congress and the president. Examples are the federal income tax system and unemployment compensation
U.S. Treasury Bond
Debt issued by the federal government
Gross Public Debt
The net public devt plus interagency borrowings within the government
Net Public Debt
The accumulation of all past federal government deficits; the total amount owed by the federal government to individuals, buisnesses, and foreigners
Gross Domestic Product (GDP)
The dollar value of all final goods and services produced in a one-year period
Federal Reserve System (the Fed)
The system created by Congress in 1913 to serve as the nation's central banking organization
Federal Open Market Committee
The most importance body within the Federal Reserve System. It decides how monetary policy should be carried out.
The utilization of changes in the amount of money in circulation to alter credit markets, employment, and the rate of inflation
Loose Monetary Policy
Monetary policy that makes a credit inexpensive and abundant, possibly leading to inflation
Tight Monetary Policy
Monetary policy that makes credit expensive in an effort to slow the economy
Goods and services produced outside a country but sold within its borders
Goods and services produced domestically for sale abroad
Taxes on imports
A restriction imposed on the value or number of units of a particular good that can be brought into a country. Foreign supplies are unable to sell more than the amount specified.
Balance of Trade
The difference between the value of a nation's exports of goods and the value of its imports of goods
Current Account Balance
A wider concept than the balance of trade, which includes the balance of trade in services, unilateral transfers, and other items.
A legal method by which individuals and buisnesses are allowed to reduce the tax liabilities owed to the government
A tax that rises in percentage terms as income rise
A tax that falls in percentage terms as income rise