Introduction to Macroeconomics Flashcards
The alternation between economic downturns, known as recessions, and economic upturns known as expansions
Business Cycle
A very deep and prolonged downturn
Depression
Periods of economic downturns when output and unemployment are rising
Recessions
The number of people who are currently working for pay in the economy
Employment
The number of people who are actively looking for work bu aren’t currently employed
Unemployment
Equal to the sum of employment and unemployment
Labor force
The percentage of the labor force that is unemployed
Unemployment rate
The quantity of goods and services produced
Output
The economy’s total production of goods and services for a given time period
Aggregate output
A rising overall price level
Inflation
A falling overall price level
Deflation
An economy experiences this when the overall price level is changing only slowly if at all
Price Stability
An increase in the maximum amount of goods and services an economy can produce
Economic Growth
Simplified representation used to better understand a real-life situation
Model
Means that all other relevant factors remain unchanged, also known as the ceteris paribus assumption
Other Things Equal Assumption
