macro economics 101 Flashcards
Gross Domestic Product
the value of all final goods and services produced within a country’s border in a year
Nominal GDP
GDP not adjusted for inflation
Real GDP
GDP adjusted for inflation
Recession
six months of decrease in GDP
Depression
severe recession
Unemployment Rate equation
unemployed ppl divided by working ppl times 100
unemployed people
people who are of working age, able to work, and trying to work but still not in the labor force
3 types of unemployment
- Frictional Unemployment
- Structural unemployment
- Cyclical Unemployment
Frictional Unemployment
the time period between jobs where a worker is unemployed
Structural Unemployment
unemployment caused by lack of demand or being replaced by machines
Cyclical Unemployment
Unemployment due to a recession
people buy less = businesses fire ppl = fired people cant buy that much, rinse repeat
Natural Rate of Unemployment
the lowest rate of unemployment where only frictional and structural unemployment exists
Inflation
an increase in a currency relative to the people using it, resulting in prices rising over time
Deflation
A decrease in general price level of goods
market basket
set of commonly purchased items
