| A | B |
|---|
| Gross domestic product | total value of all final goods & services produced in an economy over a year |
| Intermediate goods | Goods used in production of final goods |
| Durable goods | Goods that last a relatively long time |
| Nondurable goods | Good that last a short amount of time |
| Nominal GDP | GDP measured in current prices |
| Read GDP | GDP measured in constant, unchanging prices |
| Gross national product | Annual income earned by U.S. owned firms & residents |
| Depreciation | Loss of value in capital equipment from wear & tear or decrease in the value of currency |
| Price level | Average of all prices in an economy |
| Aggregate supply | Total amount of goods & services in an economy available at all possible price levels |
| Aggregate demand | Amound of goods & services that will be purchased at all price levels |
| Business cycle | Period of expansion followed by a contraction and so on |
| Expansion | Period of business cycle when there is economic growth |
| Peak | Period of the business cycle which the height of expansion |
| Contraction | Period of the business cycle when there is economic decline |
| Trough | The lowest point in the business cycle |
| Recession | A prolonged contraction |
| Depression | A long & severe recession |
| Stagflation | Decline in the real GDP combined wiht an increase in the price level |
| Saving | Income not used for consumption |
| Inflation | A general increase in prices |
| Consumer Price Index | Measures prices of a standard group of goods meant to represent the "market base" of a typical consumer |
| Unemployment | Percentage of a nation's labor force that is without a job |
| Monetary policy | Actions the Federal Reserve takes to influence the level of real GDP and inflation rate |
| Fiscal policy | Use of government spending & revenue collection to influence the economy |
| Non-market activities | Things you do yourself like childcare, cooking - things you don't pay others to do |
| Structural unemployment | Occurs when worker's skills do not match the jobs available |
| Frictional unemployment | Occurs when people take some time to find a job |
| Seasonal unemployment | Occurs as a result of harvest schedules, vacation times - industry slows or shuts down in the off season |
| Cyclical unemployment | Unemployment rises during economic downturns and falls during economic growth |
