Exam Review: Unemployment and GDP

These flashcards cover key terms and concepts related to unemployment, GDP, and related economic theories as discussed in recent lectures.

GDP

Gross Domestic Product; the total market value of all final goods and services produced in a country in a given period.

Nominal GDP

The total market value of all final goods and services produced in a country, measured in current prices.

Real GDP

The total market value of all final goods and services produced in a country, adjusted for inflation.

Unemployment Rate

The percentage of the labor force that is unemployed.

Labor Force Participation Rate

The percentage of the adult population that is part of the labor force.

Frictional Unemployment

Short-term unemployment that occurs when people are in between jobs or entering the labor market.

Structural Unemployment

Long-term unemployment that occurs when there is a mismatch between the skills of the unemployed and the skills needed for available jobs.

Cyclical Unemployment

Unemployment caused by a downturn in the economy or the business cycle.

Natural Rate of Unemployment

The level of unemployment that exists when the economy is in long-term equilibrium; typically includes only frictional and structural unemployment.

Underemployment

A situation where workers are employed, but their skills are not fully utilized and they are working in jobs below their qualification level.

Discouraged Workers

Individuals who have given up looking for work and are therefore not included in the unemployment rate.

Investment

The purchase of goods that will be used to produce other goods and services.

Bond

An IOU; a formal contract to repay borrowed money with interest at a future date.

Stock

A share in the ownership of a company.

Financial Intermediaries

Institutions that connect savers and borrowers, such as banks and mutual funds.

Private Saving

The portion of personal income that is not consumed or spent.

Public Saving

The saving of the government sector; measured as the difference between government revenue and spending.

Fiscal Policy

Government policy regarding taxation and spending to influence the economy.

Aggregate Demand

The total demand for goods and services within a particular market.