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The structure of economic activity in a community, a region, a group of countries, or the world
Gross Domestic Product (GDP)
The market value of all final goods and services produced in the nation during a particular period, usually a year
Gross world product
The market value of all final goods and services produced in the world during a particular period, usually a year
A variable that measures something at a particular point in time, such as the amount of money you have with you right now
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
The rise and fall of economic activity relative to the long-term growth trend of the economy; also called business cycles
A sharp reduction in an economy's total output accompanied by high unemployment lasting more than a year
A sustained decline in the economy's total output lasting at least two consecutive quarters, or six months; an economic contraction
Coincident economic indicators
Variables that reflect peaks and troughs in economic activity as they occur; examples include employment, personal income, and industrial production
Lagging economic indicators
Variables that follow, or trail, changes in overall economic activity; examples include the interest rate and the average duration of unemployment
A composite measure of all final goods and services produced in an economy during a given period; real GDP
The relationship between the economy's price level and aggregate output demanded, with other things constant
A composite measure reflecting the prices of all goods and services in the economy relative to prices in a base year
Real gross domestic product (real GDP)
The economy's aggregate output measured in dollars of constant purchasing power
Aggregate demand curve
A curve representing the relationship between the economy's price level and real GDP demanded per period, with other things constant
Aggregate supply curve
A curve representing the relationship between the economy's price level and real GDP supplied per period, other things constant
Federal budget deficit
A flow variable measuring the amount by which federal government outlays exceed federal government revenues in a particular period, usually a year
Macroeconomic policy that focuses on shifting the aggregate demand curve as a way of promoting full employment and price stability
A contraction, or stagnation, of a nation's output accompanied by inflation in the price level
Macroeconomic policy that focuses on a rightward shift of the aggregate supply curve through tax cuts or other changes to increase production incentives
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