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Gross Domestic Product (GDP)
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Price value of all Final goods and services produced in boarders if the US within 1 year.
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Intermediate Goods
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Goods used in the production of final goods.
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Nominal GDP
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GDP measured in current prices.
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Real GDP
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Expressed in constant or un changing price.
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Aggregate Supply
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Total amount of goods and services in the economy available at all possible price levels.
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Aggregate Demand
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Amount of goods and services in the economy that will be purchase at all possible prices.
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Business Cycle
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A period of macro economic expansion followed by a period of contraction.
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Recession
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Prolonged economic contraction.
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Depression
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Severe, long lasting recession.
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Stagflation
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A decline in real GDP combined with a rise in the price level.
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Capital Deepening
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Process of increasing the amount of capital per worker.
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Inflation
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General increase in price.
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Price Index
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Measurement that shows how average price of standard goods changes over time.
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Frictional Unemployment
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Unemployment that occurs when people take time to find a job.
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Seasonal Unemployment
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Unemployment occurs as a result of harvest schedules or vacation, industry slows or shuts down during certain season.
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Structural Unemployment
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Unemployment that occurs when workers skills do not match the jobs that are available.
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Cyclical Unemloyment
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Rises during economic downturns and falls when economy improves.
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Full Employment
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Level of employment reached when cyclical is 0%.
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Under Employment
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Working a job you are over qualified for, or working part time when full time is desired.
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Discouraged Worker
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A person who wants a job but has given up looking.
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Consumer Price Index (CPI)
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Price index determined by measuring price of standard market basket of typical urban consumer.
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Inflation Rate
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Percent rate of change in price level over time.
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Hyperinflation
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Inflation out of control.
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Core Inflation Rate
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Rate of inflation excluding food and energy.
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Wage Price Spiral
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Wages go up > prices go up > wages go up> prices go up. Etc.
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Discount Rate.
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Rate of federal reserve charges for loans to commercial banks.
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Federal Funds Rate
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Interest rate that banks charge each other for loans.
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Money Creation
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Process by which money enters into circulation.
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Required Reserve Ratio
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Ratio of reserves to deposits required by banks by the federal reserve.
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Prime Rate
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Rate of interest banks charge on short term loans to their best customers.
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Inside Log
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Delay in implementing monetary policy.
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Outside Log
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Time it takes for monetary policy to have an effect.
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