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deflation
reduction of the general level of prices in an economy
discouraged workers
a marginally attached worker who has not made specific efforts to find a job within the previous four weeks because previous unsuccessful attempts were discouraging
GDP trend line (potential GDP
typical GDP
gross domestic product GDP
dollar value of all final goods and services produced within a country's borders in 1 year
4 parts:
Consumer spending (70%)
Investment (15%)
Government spending (20%)
Net exports (exports-imports)
inflation
rising general level of prices
intermediate goods and services
goods used to produce another (rubber for cars)
labor force
anyone...
-16 years or older
-able and willing
-not in jail or hospitals
-not in military, school full time, retired
nominal wage
wage measured by dollar rather than purchasing power
real GDP
GDP based on base year prices
-adjusted for inflation
real wage
wage measured by purchasing power
unemployed
when you have no job and are actively seeking one
GDP Price Index (GDP Deflator)
(nominal GDP)/(real GDP) x 100
inflation rate (percent change)
(current CPI-base CPI)/(base CPI) x 100
Real GDP from a price index
(nominal GDP x100)/(price index)
recession
any period of two or more quarters (6 months) during which real GDP does not grow.
Note
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