macroeconomics
study of aggregate factors, such as employment, price level & national income
GDP
total market value of all final goods and service produced in an economy in a given time period (measures value of production)
economic growth
expansion of economy's production possibilities (outward shift of PPF) - measured by increase in real GDP
economic growth rate
% change in quantity of goods/services produced from one year to the next
real GDP
value of total production of all the nation's farms, factories, shops and offices measured in the prices of a single year
potential GDP
value of real GDP when all the economy's factors of production are fully employed
recession
period during which real GDP decreases for at least 2 successive quarters
expansion
period during which real GDP increases
unemployment
state in which a person does not have a job, but is available for work, willing to work & has made some effort to find work within the last 4 weeks
labour force
# of people employed & unemployed
unemployment rate
% of people in the labour force who are unemployed (part time employees considered employed, even if they want to work full time)
involuntary part time rate
% of people in labour force who have part time jobs and want full time jobs
employment-to-population ratio
% of working age people who have jobs
full employment
occurs when the labour market is in equilibrium (those who want a job have one)
natural rate of unemployment
unemployment rate at full employment
inflation rate
% change in the price level
government budget surplus
government collects more in taxes than it spends
government budget deficit
government spends more than it collects in taxes
fiscal policy
use of federal budget to achieve macroeconomic objectives (such as full employment, sustained long-term economic growth, and price level stability)
monetary policy
changing interest rates and changing amount of money in economy
purchasing power parity
allows us to account for differences in value of dollar and compare "what your income can buy domestically" (how much of something you can buy with $1 USD)
human development index
combines GDP per capita (PPP-adjusted), life expectancy at birth and adult literacy; way to measure growth
physical quality of life index
combines life expectancy at birth, infant mortality and adult literacy; way to measure growth
nominal GDP
value of all final goods/services produced in a given year
GDP deflator
average of the prices of the goods in GDP in the current year as a % of the base year prices
aggregate demand
total demand for all goods and services in an economy in a given time period
aggregate supply
total supply of goods and services produced by an economy during a specific time period
inflation
sustained increase in the average level of prices
expansionary fiscal policy
increase in government expenditures or decrease in tax revenues (AD curve shift right)
contractionary fiscal policy
decrease in government expenditures or increase in tax revenues (AD curve shift left)
money
any commodity or token that is generally acceptable as a means of payment
chartered bank
private firm that is licensed to receive deposits and make loans
reserves
cash in vault and deposits in Bank of Canada
crowding out
tendency for expansionary fiscal policy to decrease investment
crowding in
tendency for expansionary fiscal policy to increase investment
supply side policies
policies that affect cost to product (wages, raw materials, electricity, oil, taxes)