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Macroeconomics
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the study of economy-wide phenomena, including three main aggregates inflation, unemployment, and productivity
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global economic crisis
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Business cycles take a severe turn and affect consumers and businesses across the globe
Marketers must reevaluate their strategies and concentrate on their most promising products
Marketers must reevaluate their strategies and concentrate on their most promising products
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unemployment rate
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the percentage of the labor force that is unemployed
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inflation rate
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the percentage increase in the price level from one year to the next
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Productivity
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aggregate output per hour of work that a nation produces in total goods and services
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aggregate
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Gathered into a whole; total
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Gross Domestic Product (GDP)
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A measurement of the total goods and services produced within a country.
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Actual Real GDP
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the value of total output corrected for any changes in prices
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Natural Real GDP
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designates the level of real GDP at which the inflation rate is constant, with no tendency to accelerate or decelerate
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natural rate of unemployment
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the normal rate of unemployment around which the unemployment rate fluctuates
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GDP gap
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actual GDP - potential GDP
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unemployment gap
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the difference between the unemployment rate and the natural rate of unemployment
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bussiness cycle
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The cycle of economy Peak(high Point) Contraction(decrease) Trough(low point where we were during the depression) Expansion (going back up) Peak
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economic growth
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a steady, long-term increase in real GDP
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target variable
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are aggregates (inflation unemployment and productivity) whose values society cares about
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policy instruments
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elements that government policymakers can manipulate directly to influence target variables
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monetary policy
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tries to influence target variables by changing the money supply or interest rates or both
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fiscal policy
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tries to influence target variables by manipulating government expenditures and tax rates
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stabilization policy
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policy to seek to influence level of aggregate demand
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closed economy
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an economy that does not interact with other economies in the world
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open economy
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an economy that interacts freely with other economies around the world
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