Lecture 8 GPD & Economic Growth

A collection of flashcards covering key terms and concepts related to Gross Domestic Product (GDP) and Economic Growth.

Gross Domestic Product (GDP)

The market value of all final goods and services produced within a country in a given time period.

Nominal GDP

The value of output at current year prices, without adjusting for inflation.

Real GDP

The value of output measured in base year prices, adjusted for inflation.

Expenditure Approach

A method to calculate GDP by adding consumption, investment, government spending, and net exports (C + I + G + (X-M)).

Unemployment Rate

The percentage of people in the labor force who are unemployed.

Frictional Unemployment

Temporary unemployment arising from the process of matching workers with jobs.

Structural Unemployment

Unemployment resulting from industrial reorganization, typically due to technological change.

Cyclical Unemployment

Unemployment that results from economic downturns or recessions.

Inflation Rate

The percentage change in the price level over a period of time.

Consumer Price Index (CPI)

An index measuring the average price of a fixed basket of goods and services, used to assess price level changes.

Aggregate Demand (AD)

The total quantity of goods and services demanded across all levels of the economy at a given overall price level.

Aggregate Supply (AS)

The total quantity of goods and services that producers in an economy are willing and able to supply at a given price level.

Fiscal Policy

The use of government spending and taxation to influence the economy.

Monetary Policy

The process by which the central bank manages money supply and interest rates to control inflation and stabilize currency.

Production Possibilities Frontier (PPF)

A curve that depicts all maximum output possibilities for two goods, given a fixed amount of resources.

Absolute Advantage

The ability of a country to produce more of a good using the same quantity of resources than another country.

Comparative Advantage

The ability of a country to produce a good at a lower opportunity cost than another country.

Trade Restrictions

Policies such as tariffs and quotas that governments use to limit international trade.