Econ unit 11

Microeconomics

The study of individual consumers, firms, and markets.

Macroeconomics

The study of the economy as a whole.

Aggregate

Total combined amount in the economy.

Gross Domestic Product (GDP)

Total value of final goods and services produced in a country in one year.

Actual GDP

The amount currently being produced.

Full Sustainable Capacity GDP (YF)

Maximum output the economy can sustain without causing inflation.

National Production

Total output produced by a nation.

Labor Force

The total number of employed and unemployed individuals actively seeking work.

Voluntarily Unemployed

People who choose not to work at the current wage.

Unemployment Rate

Percentage of the labor force that is without jobs but actively seeking work.

Frictional Unemployment

Temporary unemployment while changing jobs or entering the workforce.

Structural Unemployment

Unemployment caused by changes in technology or job skills.

Natural Rate of Unemployment

Normal unemployment derived from frictional and structural causes.

Full Employment

A state where unemployment does not equal zero due to the existence of frictional and structural unemployment.

Demand-Deficient Unemployment

Unemployment caused by low overall demand in the economy.

Inflation

Rising general price levels over time.

Deflation

Falling general price levels over time.

Price Level

Average of current prices in the economy.

Hyperinflation

Extremely rapid inflation.

Indexing

Adjusting wages/payments for inflation.

Real Value

Value adjusted for inflation.

Nominal Value

Value not adjusted for inflation.

Price Index

Measure of average price changes over time.

Price Deflator

Index used to remove inflation from GDP.

Consumer Price Index (CPI)

Measure of prices paid by consumers for a basket of goods and services.