macroeconomic intro

Trade/Business Cycle

→ A diagram showing the periodic/cyclical fluctuations in economic activity. The business cycle shows that economies typically move through a pattern of economic growth with the phases: recovery (contraction of an economy comes to an end), boom (when real GDP reaches its peak), slowdown (slower economic growth), recession (2 consecutive quarters of GDP decreasing)

Aggregate Supply

→ the total amount of goods and services produced and supplied by an economy's firms over a specific time period at given average price levels.

Real GDP

→ The total money value of all final goods and services produced in an economy in a given time period, usually one year, adjusted for inflation.

Recession

→ A phase in the trade cycle referring to 2 consecutive quarters of negative GDP growth.

Boom

→ A phase in the trade cycle where there is increased AD/higher GDP/economic expansion.

Peak

→ A phase in the trade cycle where GDP reaches its peak.

Real GDP per Capita

→ Real GDP divided by the population of the country.

Recovery

→ A phase in the trade cycle where the contraction of the economy will come to an end.

Real Income

This refers to nominal income that has been adjusted for inflation

Aggregate Demand

→ The total expenditure by households, businesses, government and foreign sectors on g/s over a given period of time, at any given average price level. It measures the demand for all g/s in an economy. C+I+G+(X-M)

Gross Domestic Product (GDP)

→ The total money value of all final goods and services produced in an economy in a given time period, usually one year.

Equilibrium

→ This condition is met in the short run when AD = SRAS and in the long run when AD = LRAS.

Nominal Income

→ income that has not been adjusted for inflation and is expressed at current prices.

Consumption

→ Spending by households on consumer goods and services over a period of time.

Investment

→ expenditure by firms on capital.