Macroeconomics: Prices, Unemployment, and Output

Vocabulary terms and definitions covering key macroeconomic topics including prices and inflation, jobs and unemployment, and gross domestic product (GDP).

Consumer Price Index (CPI)

A score that tracks how the price of a regular "shopping cart" of everyday items changes over time compared to a starting year.

Core Rate of Inflation

How fast prices are going up overall, leaving out food and energy costs (like gas and electricity) because those change wildly all the time.

Deflating

Adjusting a dollar amount to strip away the effects of inflation so you can see its true, real-world value.

Deflation

A phase where the prices of most things are actually dropping over time instead of going up.

Indexing

Automatically increasing a payment or wage by the exact same percentage that inflation goes up so that your money keeps its same buying power.

Rate of Inflation

The yearly percentage that shows how much more expensive everyday items have gotten.

Cyclical Unemployment

Extra joblessness that happens purely because the economy is doing poorly (a recession) and businesses are struggling.

Discouraged Workers

People who want a job but haven't actively looked for work in the last four weeks, usually because they've lost hope of finding one.

Frictional Unemployment

Temporary joblessness that happens naturally when people are in between jobs or just entering the workforce looking for a match.

Participation Rate

The percentage of working-age people who are either working a job right now or actively looking for one.

Structural Unemployment

Long-lasting job loss that happens even when the economy is perfectly healthy, usually because workers' skills no longer match what companies need.

Worker Mobility

How easily workers can switch between different jobs, companies, or entire industries.

Gross Domestic Product (GDP)

The total price tag of all the finished goods and services made inside a country over a specific time period.

Nominal Gross Domestic Product

A country's total economic output calculated using current, today-only prices without adjusting for inflation.

Real Gross Domestic Product

A country's actual physical volume of economic output calculated using fixed prices from a baseline year so inflation doesn't distort the numbers.