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Economy
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The structure of economic activity in a locality, a region, a country, a group of countries, or the world.
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Gross Domestic Product (GDP)
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The market value of all final goods and services produced in the nation during a given time period, usually a year.
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Consumption
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Household purchases of final goods and services.
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Investment
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The purchase of new plants, new equipment, new buildings, new residences, and net additions to inventories.
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Government Purchases
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Spending on goods and services by all levels of government.
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Net Exports
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The value of a country's exports minus the values of its imports.
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Aggregate Expenditure
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Total spending on all goods and services produced in the economy during the year.
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Aggregate Income
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The sum of all income earned by resource suppliers in the economy during the year.
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Depreciation
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The value of the capital stock that is used up or becomes obsolete in producing GDP during the year.
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Nominal GDP
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The economy's aggregate output based on prices at the time of the transaction; current-dollar GDP.
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Real GDP
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The economy aggregate output measured in dollars of constant purchasing power; GDP measured in terms of the goods and services produced.
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Consumer Price Index (CPI)
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Measure of inflation based on the cost of a fixed "market basket" of goods and services purchased by a typical family.
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Business Cycle
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Fluctuations reflecting the rise and fall of economic activity relative to the long-term growth trend of the economy.
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Recession
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A decline of total production lasting at least two consecutive quarters, or at least six months.
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Expansion
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The phase of economic activity during which the economy total output increases.
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Leading Economic Indicators
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Measures that usually predicts, or lead to, recessions or expansions.
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Aggregate Output
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A composite of measure of all final goods and services produced in an economy during a given period; real GDP.
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Aggregate Demand
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The relationship between the average price of aggregate output and the quantity of aggregate output demanded, with other things constant.
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Price Level
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A composite measure reflecting the prices of all goods and services in the economy relative to prices in a base year.
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Aggregate Demand Curve
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A curve representing the relationship between the economy's price level and real GDP demanded per period, other things constant.
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Aggregate Supply Curve
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A curve representing the relationship between the economy's price level and real GDP supplied per year, other thigns constant.
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