Chapter 24 to 26 Study guide cis macroeconomic

Employment Act of 1946

Created federal government responsibility for promoting full employment and economic stability.

Gross National Product (GNP)

Measures the total economic output produced by residents of a country, including income earned abroad.

Income Approach to GDP

Calculates GDP by summing all incomes earned in the production of goods and services within a specific period.

Consumption of Fixed Capital

Refers to the decrease in value of fixed assets due to wear and tear or obsolescence.

Real Interest Rate

Calculated as Nominal Interest Rate minus Inflation Rate.

Frictional Unemployment

Temporary unemployment during job transitions or among new labor force entrants.

Structural Unemployment

Caused by skills mismatch due to economic shifts, technological advances, or geographical job changes.

Cyclical Unemployment

Unemployment linked to economic downturns, arising from decreased demand for goods and services.

Cost of Living Adjustments (COLA)

Income adjustments made to counteract inflation effects, maintaining purchasing power.

Expenditures Approach to GDP

Calculates GDP by summing all expenditures on final goods and services in an economy.

Wages and Salaries

Compensation paid to employees for their labor.

Net Exports

The value of a country's exports minus its imports, reflecting international trade balance.

Taxes on Production

Government taxes on goods and services that affect production costs and consumer prices.

Taxes on Income

Progressive taxes imposed on individual or entity earnings, calculated as a percentage of net income.