Economics Ch. 9
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24 terms
Terms | Definitions |
|---|---|
 Real GDP | The total value of all final goods and services produced during a particular year or period, adjusted to eliminate the effects of changes in prices |
| Nominal GDP | The total value of final goods and services for a particular period valued in terms of prices for that period. |
| Business Cycle | The economy's pattern of expansion, then contraction, then expansion again |
| Expansion | A sustained period in which real GDP is rising |
| Recession | A sustained period in which real GDP is falling |
| Peak | The point of the business cycle at which an expansion ends and a recession begins |
| Trough | The point of the business cycle at which a recession ends and an expansion begins |
| Inflation | An increase in the average level of prices |
| Deflation | A decrease in the average level or prices |
| Hyperinflation | An inflation rate in excess of 200% per year |
| Price Index | A number whose movement reflects movement in the average level of prices |
| Base Period | A time period against which costs of the market basket in other periods will be compared in computing a price index |
| Consumer price index | A price index whose movement reflects changes in the prices of goods and services typically purchased by consumers |
| Implicity Price Deflator | A price index for all final goods and services produced; it is the ratio of nominal GDP to real GDP |
| Personal Consumption Expenditures Price Index | A price index that includes durable goods, nondurable goods, and services and is provided along with estimates for prices of each component of consumption spending |
| Real Value | A value expressed in units of constant purchasing power |
| Nominal Value | A value expressed in dollars of the current period |
| Labor Force | The total number of people working or unemployed |
| Unemployment Rate | The percentage of the labor force that is unemployed |
| Natural level of employment | The employment level at which the quantity of labor demanded equals the quantity supplied |
| Natural rate of unemployment | The rate of unemployment consistent with the natural level of employment |
| Frictional unemployment | Unemployment that occurs because it takes time for employers and workers to find each other |
| Structural unemployment | Unemployment that results from a mismatch between worker qualifications and the characteristics employers require |
| Cyclical unemployment | Unemployment in excess of the unemployment that exists at the natural level of employment |
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