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Business cycle
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The economy's movement from peak to trough and trough to peak
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Depreciation
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The process by which capital ages and loses value
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Depression
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An especially lengthy and deep recession
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Double counting
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Counting output more than once as it travels through the production stages
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Durable goods
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Long-lasting goods, like cars and computers
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Exchange rate
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The value of one currency in terms of another currency
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Exports
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Domestically produced goods and services that a country sells abroad
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Final goods and services
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Goods at the end of the chain of production that are sold for consumption, investment, government, and trade purposes
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GDP deflator
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A price index measuring the average prices of all final goods and services included in the economy
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GDP per capita
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GDP divided by population
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Gross domestic product (GDP)
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The value of all final goods and services produced within a country in a given year
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Gross national product (GNP)
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GDP plus what is produced domestically and what is produced by domestic labor and businesses abroad in a year
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Imports
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Goods and services that are produced abroad and purchased domestically
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Inflation
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A sustained increase in the overall level of prices
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Intermediate goods
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Goods that go into producing other goods
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Inventories
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Goods that have been produced but not yet sold
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National income
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All income to businesses and people that is generated in GDP
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Net national product (NNP)
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GNP minus the value of physical capital that is worn out or reduced in value because of aging
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Nominal value
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An economic statistic measure with actual prices
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Nondurable goods
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Short-lived goods, like food and clothing
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Peak
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The highest point of the economy before a recession begins
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Real value
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An economic statistic adjusted for inflation
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Recession
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A significant decline in real GDP
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Services
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The most common jobs in a modern economy, where no tangible good is produced; jobs in education, health care, and legal and financial services
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Standard of living
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A measurement that includes all elements that affect people's well-being, whether or not they are bought and sold in the market
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Structures
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A supply-side component of GDP that includes homes, office buildings, shopping malls, and factories
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Trade balance
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The gap between exports and imports
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Trade deficit
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When a country's exports are smaller than its imports
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Trade surplus
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When a country's exports are greater than its imports
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Trough
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The lowest point of a recession before a recovery begins
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