Economics Exam Review: Inflation, GDP, and Unemployment

This set of flashcards covers key vocabulary and concepts from the economics lecture on the business cycle, inflation, GDP, and unemployment.

Business Cycle

The fluctuation of economic activity over time, typically consisting of expansion, peak, contraction, and trough.

Intermediate Goods

Goods that are used in the production process to produce final goods and are not counted towards GDP.

Final Goods

Products that are purchased and consumed by the end consumer, which are included in GDP.

Real GDP

Gross Domestic Product adjusted for inflation, measuring the value of all finished goods and services produced within a country's borders in a specific time.

Nominal GDP

Gross Domestic Product measured using current prices without adjusting for inflation.

GDP per capita

The total economic output of a country divided by the number of people in that country, used to measure the economic performance relative to population size.

Cyclical Unemployment

Unemployment resulting from economic recessions and downturns, associated with a lack of aggregate demand.

Structural Unemployment

Long-term unemployment resulting from changes in the economy that eliminate jobs in certain industries or sectors.

Frictional Unemployment

Short-term unemployment that occurs when people are in between jobs or entering the workforce.

Inflation

The rate at which general prices for goods and services rise, eroding purchasing power.

Consumer Price Index (CPI)

A measure that examines the average change over time in the prices paid by consumers for a market basket of goods and services.

Producer Price Index (PPI)

An index that measures the average changes in prices received by domestic producers for their output.

Stagflation

An economic condition characterized by slow growth, high unemployment, and inflation.

Hyperinflation

Extremely high and typically accelerating inflation, often resulting in a collapse of a country's monetary system.

Disinflation

A decrease in the rate of inflation – a slowing of the inflation rate.

Deflation

A reduction in the general price level of goods and services.

Natural Rate of Unemployment

The unemployment rate that exists when the economy is at full employment, typically consisting of frictional and structural unemployment.