Economics Unit 3 Key Terms

circular flow model

an economic model that illustrates how money moves from producers to consumers and back again in an endless loop

GDP growth rate

the percentage change in GDP from one period to another

GDP (gross domestic product)

the total market value of all final goods and services produced within a country’s borders during a given period (usually a year)

real GDP per capita

country's real GDP ÷ country’s total population

GDP growth

increasing the size of the pie (GDP) can increase the amount available to each person (gdp per capita)

GDP contraction

decreasing the size of the pie (GDP) can decrease the amount available to each person (GDP per capita)

standard of living

a measure of the goods and services available to each person in a country; a measure of economic well-being

quality of life

the extent to which a person obtains satisfaction from life, including emotional, material, and physical well-being

unemployment rate

the percentage of the labor force that is willing and able to work, does not currently have a job, and is actively looking for employment (unemployed÷labor force)

potential labor force

those age 16 or older who are not in the military or institutionalized

labor force

the total number of workers, including both the employed and the unemployed

employed

people who have jobs

unemployed

people who are willing and able to work, do not currently have jobs, and are actively looking for employment