Ch.2 (part 2) Flashcards
list the six key economic indicators
GDP (gross domestic product), unemployment rate, housing starts, commodity prices, stock markets and increase/decrease in productivity
define GDP
Gross Domestic Product. the total goods and services produced by the economy
a major influence on the growth of GDP is …
how productive the workforce is - that is, how much output workers create with a given amount of input
productivity is measured by …
dividing the total output of goods and services of a given period by the total hours of labour required to produce them
define frictional unemployment
refers to those who have quit work, are entering the labour force for the first time, or are returning to the labour force after a significant time away
define structural unemployment
refers to unemployment caused by the restructuring of firms or by a mismatch between the skills of job seekers and the requirements of avalible jobs
define cyclical unemployment
occurs because of a recession or a similar downturn in the business cycle
define seasonal unemployment
occurs where demand for labour varies over the year, as with the harvesting of crops
define CPI (acronym and definition)
Consumer Price Index. the index economists use to measure the effects of inflation
inflation refers to …
a general rise in the prices of goods and services over time
disinflation describes …
a condition where price increases are slowing (i.e. the inflation rate is declining)
deflation means …
that prices are actually declining
business cycles (also known as …) are …
(economic cycles), the periodic rises and falls that occur in economies over time
recession is …
two or more consecutive quarters of decline in GPD (gross domestic product)
