Formula Flash Cards

GDP

Gross Domestic Product; the total monetary value of all final goods and services produced within a country's borders in a specific time period.

Real GDP

Nominal GDP adjusted for inflation, representing the value of goods and services at constant prices.

GDP deflator

A measure of the level of prices of all new, domestically produced, final goods and services in an economy.

CPI (Consumer Price Index)

A measure that examines the average change over time in the prices paid by consumers for a basket of goods and services.

Unemployment rate

The percentage of the labor force that is jobless and actively looking for work.

Labor force participation rate

The percentage of the adult population that is part of the labor force, including both the employed and unemployed.

Required reserves

The minimum amount of reserves a bank must hold against deposits, as mandated by central bank policies.

Money multiplier

The factor by which a change in reserves will affect the total money supply in an economy.

Spending multiplier

The ratio of the change in GDP to the initial change in spending.

Tax multiplier

The ratio of change in GDP to the initial change in taxes, typically negative due to the decrease in disposable income.

Phillips Curve

A concept that illustrates the inverse relationship between inflation and unemployment in the short run.

Real exchange rate

The nominal exchange rate adjusted for differences in price levels between two countries.

Current account

A component of a country's balance of payments that records transactions involving goods, services, income, and current transfers.

Economic growth

An increase in the production of goods and services in an economy over a period of time.

Deficit

The financial situation where government spending exceeds its revenue.

MPC (Marginal Propensity to Consume)

The portion of additional income that a household consumes rather than saves.

MPS (Marginal Propensity to Save)

The portion of additional income that a household saves rather than consumes.