Course 1 - Chapter 4 Flashcards
Balance of Payments
Canada’s interactions with the rest of the world which are captured here in the current acct and capital acct
Business cycle
The recurrence of periods of expansion and recession in economic activity
5 phases of Business cycle
- Trough
- Recovery
- Expansion
- Peak
- Contraction / recession
Coincident indicators
Statistical data that, on average, change at approximately the same time and in the same direction as the economy as a whole
Consumer Price Index (CPI) (2)
Price index which measures the cost of living by measuring the prices of a given basket of goods
Indicator of inflation
Cost-push inflation
Inflation that develops due to an increase in the costs of production
Cyclical unemployment
The amount of unemployment that rises when the economy softens, firms’ demand for labour moderates, and some firms lay off workers in response to lower sales
It drops when economy strengthens again
Deflation
A sustained fall in prices where the CPI is negative
Demand
The quantity demanded of a good/service based on a particular price during a given period
The lower the price, the higher the demand (usually)
Demand-pull inflation
Inflation that develops when continued consumer demand pushes prices higher
Discouraged workers
Individuals that are available. and willing to work but can’t find jobs and have not made specific efforts to find one w/in the previous month
Disinflation
A decline in the rate at which prices rise (ie. a decrease in the rate of inflation)
Economic indicators
Statistics or data series that are used to analyse business conditions and current economic activity (eg. lead, lagging or coincident indicators)
Economics
Social science concerned w/ an understanding of production, distribution, and consumption of goods/services
