macroeconomics
the study of the economy as a whole. looking at the economy on a national or global level
gdp
the total dollar value of all final goods and services produced within a country during one calendar year
consumer spending
all goods and services bought by consumers
intermediate goods and services (input resources)
component parts of the goods
used goods
goods that are being sold secondhand are not counted toward gdp
financial assets
stocks, bonds, and other financial products do not count towards gdp
gdp expenditure formula
C+I+G+(X-M)
nominal gdp
gdp calculated using current prices during a given year. this value does not take into account changes in prices and the purchasing power of the dollar
real gdp
gdp calculated that accounts for changes in price levels and the purchasing value of the dollar. this allows economists to compare across time because purchasing power is held constant
aggregate output
the total quantity of final goods and services produced within a country
unemployed
people actively looking for work (within the last four weeks) but not currently employed between age 16 and 64
employed
people actively working either part or full time
discouraged workers
someone who gives up looking for work but wants a job
frictional unemployment
unemployment due to searching for a job
mostly due to people entering or reentering the work force
structural unemployment
unemployment from when workers lack the skills required for the available jobs or when there are more people seeking jobs in a labor market than there are jobs available at the current wage rate
when industries become obsolete unemployed workers may have
cyclical unemployment
unemployment due to downturns in the business cycle
inflation
when the general price level increases. this causes money to lose purchasing power
inflation rate
the percent change in the general price level over one year
deflation
when the general price level decreases. this causes money to gain purchasing power
disinflation
when the inflation rate increases at a decreasing rate
hyperinflation
an extremely high inflation rate that is unstable
purchasing power
how much value a dollar has
nominal value
any value stated in current dollars
real value
value that is converted to account for changes in the price level
aggregate price level
is a measure of the overall price level in an economy
price index
measures the cost of purchasing a given market basket (a variety of products chosen by economists) in a given year. this index value is normalized so that it is equal to a 100 in the selected base year
cpi
measures the cost of a market basket of a typical urban american family
demand-pull inflation
increases in the price level (inflation) resulting from an excess of demand over output at the existing price level, caused by an increase in aggregate demand
cost-push inflation
When prices rise due to an increase in the cost of production.