Economic Performance Flashcards
Business cycle?
A series of growing and shrinking periods of economic activity
Consumer price index (CPI)?
Measure of changes in the prices of goods and services commonly purchased by consumers
Consumption (calcul. GDP)
All spending by households on durable goods, nondurable goods, and services.
Contraction?
Producers cut back, resources become less scarce, and prices tend to stabilize.
Cyclical unemployment?
Factor of overall unemployment that relates to cyclical trends in growth and production in the business cycle
Depression?
Extended period of high unemployment and reduced business activity.
Durable good?
Good lasting longer than three years
Economic growth?
Percentage changes in real GDP
Frictional unemployment?
Temporary unemployment experienced by people changing jobs
GDP (gross (total) domestic product)?
Market value of all final goods and services produced within a nation in a given time period
Government spending (calcul. GDP)?
All of the expenditures of federal, state, and local government on goods and services
Hyperinflation?
Rapid uncontrollable rate of inflation in excess of 50% per month that makes money virtually useless
Inflation?
Sustained rise in the level of prices and a sustained fall in the purchasing power of money
Investment (calcul. GDP)?
What businesses spend, both fixed expenses and inventory
Net exports (calcul. GDP)?
All goods and services produced in the nation but sold in foreign countries minus the value of imports
Non-durable goods?
Good lasting less than three years
Peak?
Highest point of GDP
Productivity?
Amount of output produced from a set amount of inputs
Real GDP?
GDP that is corrected for changes in prices from year to year
Real GDP per capita?
Real GDP/total population
Recession?
Economic contraction lasting less than two quarters
Seasonal unemployment?
Unemployment linked to the changing of the seasons
Structural unemployment?
Situation in which jobs exist, but workers looking for work do not have the necessary skills for work or do not have the necessary skills for their jobs
Trough?
Final point of a business cycle
Underemployment?
Percentage of population who wishes to have a higher level of work or pay
Unemployment?
Percentage of population 16+ who don’t work
Unemployment rate?
Percentage of the labor force that is jobless and looking for work
What are the four components of GDP?
Consumption, investments, government spending, and net exports.
How do you calculate GDP?
C+I+G+X=GDP
What are the affects of inflation (3)?
Decrease in value of $, increase in interest rates, and decrease of real returns on savings
How is the labor force for each nation calculated?
The population of ages 16+ employed or looking/available for work.
How do you calculate unemployment rate?
Unemployed/labor force•100
What is the difference between a recession and a depression?
A recession is less that two quarters (six months) and a depression is more than two quarters.
What is the lowest point of the business cycle?
Trough
What is the highest point of the business cycle?
Peak
