ECN 203: Chapter 20 and 21
31 Cards in this Set
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Gross Domestic Product (GDP)
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total market value of final goods and services produced during a particular year or period
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Real GDP
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total market value of all final goods and services produced during a particular year or period, adjusted to eliminate the effects of changes in prices
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Nominal GDP
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total value of final goods and services for a particular period valued in terms of prices for that period
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Expansion
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a sustained period in which real GDP is rising
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Recession
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a sustained period in which real GDP is falling
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Inflation
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an increase in the average level of prices
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Deflation
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a decrease in the average level of prices
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Hyperinflation
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inflation rate in excess of 200% per year
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Price Index
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a number whose movement reflects movement in the average level of prices
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Base Period
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a time period against which costs of the market basket in other periods, will be compared in computing a price index
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Consumer Price Index (CPI)
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a price index whose movement reflects changes in the prices of goods and services typically purchased by consumers
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Real Value
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a value expressed in units of constant purchasing power
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Nominal Value
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a value expressed in dollars of the current period
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Labor Force
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total number of people working or searching for work
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Unemployment Rate
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percentage of the labor force that is unemployed
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Natural Level of Employment
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employment level at which the quantity of labor demanded equals the quantity supplied
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Frictional Unemployment
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unemployment that occurs because it takes time for employers and workers to find each other
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Structural Unemployment
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unemployment that results from a mismatch between worker qualifications and the characteristics employers require
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Cyclical Unemployment
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unemployment in excess of the unemployment that exists as the natural level of employment
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Personal Consumption
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flow variable that measures the value of goods and services purchased by households during a time period
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Gross Private Domestic Investment
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value of all goods produced during a period for use in the production of other goods and services
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Government Purchases
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sum of purchases of goods and services from firms by government agencies plus the total value of output produced by government agencies themselves, during a time period
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Transfer Payments
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payments that do not require the recipient to produce a good or service in order to receive them
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Chapter 22
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Exports
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sales of a country's goods and services to buyers in the rest of the world during a particular time period
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Imports
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purchases of foreign-produced goods and services by a country's residents during a period
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Value Added
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amount by which the value of a firm's output exceeds the value of the good and services the firm purchases from other firms
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Gross National Product (GNP)
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total value of final goods and services produced during a particular period with factors of production owned by the residents of a particular country
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Depreciation
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a measure of the amount of capital that wears out or becomes obsolete during a period
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Disposable Personal Income
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income households have available to spend on goods and services
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GDP per capita
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a country's GDP divided by its population
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ECN 203: Final Exam