Unit 6; Economic Indicators Flashcards
Gross Domestic Product (GDP)
The total value of goods and services produced within a country’s borders during a specific period of time
Inflation
A general increase in prices and fall in the purchasing value of money
Consumer Price Index (CPI)
an index of the variation in prices paid by typical consumers for retail goods and other items
Unemployment
The number of jobless people actively looking for work divided by the number of people in the labor force all times 100
Discourage Workers
People who need a job and want a job, but have not actively looked for work in the past 4 weeks because they’re unsuccessful in their search
Underemployment
When an employed person’s human capital exeeds the requirements of their current job
Frictional Unemployment
When people are entering the workforce for the first time or are between jobs because they’re looking for a better one.
Structural Unemployment
When people lose their jobs due to being removed from the economy, usually due to technology
Cyclical Unemployment
When people lose their jobs due to a recession or contracting economy
Seasonal Unemployment
When people lose their jobs because the job is temporary due to a season
Business Cycle
The fluctuating levels of economic activity over time, measured from the start of one recession to the beginning of the next
Recession
Economic decline usually lasting at least 6 months
Depression
A severe recession usually lasting at least 2 years
Fiscal Policy
Actions taken by the government to influence the economy by spending
Monetary Policy
Actions taken by the government to influence the economy by saving money
Demand Side Economics
An economic theory that states that economic growth is driven by consumer demand for goods and services
Supply Side Economics (Trickle-Down Economics)
A macroeconomic theory that states that economic growth is best achieved by reducing taxes, decreasing, regulation, and increasing the supply of goods and services
What are the THREE macroeconomic goals?
Economic growth, low unemployment, and price stability
How is GDP calculated?
Adding the price of all final goods and services
What is NOT included in the calculation of GDP?
Intermediate goods
What are the key causes of inflation?
Supply going up, demand going up, and printing more money
What are the key phases in a business cycle?
Expansion, peak, contraction, and trough
What is the biggest incentive used by the federal government?
Tax credits
What is the role of the Federal Reserve?
To promote a healthy and stable economy by carrying out monetary policy and regulating financial institutions
