Economic Indicators and Business Cycles

Flashcards covering key vocabulary related to economic indicators, GDP, GNI, inflation, unemployment, interest rates, and business cycles.

Macroeconomics

The study of the economy as a whole, focusing on economic growth and avoiding crises like recessions or depressions.

Output

Total volume of goods and services produced.

Growth

Year-to-year expansion in production capacity.

Prices

The average price level of goods and services.

Jobs

Level of employment and unemployment.

International Balances

Trade and payment balances with other countries.

Gross Domestic Product (GDP)

The total monetary or market value of all finished goods and services produced within a country’s borders in a specific time period.

GDP per capita

A measurement of the GDP per person in a country’s population, indicating the amount of output or income per person.

Gross National Income (GNI)

The total amount of money earned by a nation's people and businesses, including GDP plus income from overseas sources.

Real GDP growth rate

Measures economic growth, as expressed by gross domestic product (GDP), from one period to another, adjusted for inflation or deflation.

Base Year

The year with which the values from other years are compared, used as a comparison point for economic data.

Gross National Income (GNI)

The sum of all income earned by citizens or nationals of a country, regardless of where the economic activity takes place.

Inflation

An increase in the average price level.

Deflation

A decrease in the average price level.

Inflation Rate

The average price increase of a basket of selected goods and services over one year.

Consumer Price Index (CPI)

A measure of inflation that surveys families to determine a typical basket of goods and services consumed by households.

Unemployment

A situation where a person actively searches for employment but is unable to find work.

Unemployment Rate

Calculated by dividing the number of unemployed people by the number of people in the labour force.

Frictional Unemployment

Occurs when people voluntarily change jobs or graduates just start to look for jobs.

Cyclical Unemployment

Rises during recessionary periods and declines during periods of economic growth.

Structural Unemployment

Occurs when technological changes lead to unemployment among workers displaced from jobs that are no longer needed.

Interest

A charge to the borrower for the use of an asset, considered the 'cost of money'.

Base Rate / (Central) Bank Rate

The interest rate at which a nation's central bank lends money to domestic banks.

Mortgage

A loan used to purchase real estate, with the property serving as collateral.

Demand-pull

An increase or upward trend in spendable money that tends to result in increased competition for available goods or services.

Bottleneck

A problem that delays progress.

Surge/Soar

Increase significantly.

Unanimous

Having the agreement or consent of all.

Runaway Prices

Rising quickly in a way that is not under control.

Rate hike

A sudden or large increase in interest rates.

Upswing

Increase or improvement in economic situation, recovery.

Mortgage costs

Loans on home, land or other types of real estate.

Business cycles

Cyclical upswings and downswings in the measures of economic activity such as output, employment, income, and sales.

Boom

A long period of expansion.

Recession

A significant, widespread, and prolonged downturn in economic activity, often defined as two consecutive quarters of negative GDP growth.

Depression

A severe and prolonged downturn in economic activity, lasting three or more years.