Macroeconomics Ch. 1 Flashcards
Microeconomics
The study of how households and firms make choices, how they interact in markets, and how the government attempts to influence their choices.
Macroeconomics
The study of the economy as a whole, including topics such as inflation, unemployment, and economic growth.
Business Cycle
Alternating periods of economic expansion and economic recession
Long-run economic growth
The process by which increasing productivity raises the average standard of living.
Labor productivity
The quantity of goods and services that can be produced by one worker or by one hour of work.
Real GDP
The value of all final goods and services, adjusted for changes in the price level
Labor force
The sum of employed and unemployed workers in the economy
Unemployment rate
The percentage of the labor force that is unemployed
Inflation rate
The percentage increase in price levels from one year to the next.
Deflation
A sustained decrease in the price level.
Monetary policy
The actions that central banks take to manage the money supply and interest rates to pursue macroeconomic policy objectives.
Fiscal policy
Changes in government taxes and purchases that are intended to achieve macroeconomic policy objectives.
