Economic Indicators and Performance (Lesson 1.4)

Economic Indicators

Statistics that show whether an economic system is strengthening, weakening, or remaining stable.

Aggregate Output

The total quantity of goods and services produced by an economic system during a given period.

Standard of Living

The total quantity and quality of goods and services that people can purchase with their currency.

Gross Domestic Product (GDP)

The total value of all goods and services produced within a given period by a national economy.

Gross National Product (GNP)

The total value of all goods and services produced by a national economy within a given period regardless of production location.

Real GDP

GDP that has been adjusted to account for changes in currency values and price changes.

Purchasing Power Parity

The principle that exchange rates are set so that the prices of similar products in different countries are about the same.

Productivity

A measure of economic performance that compares how much a system produces with the resources needed to produce it.

Balance of Trade

The economic value of all the products that a country exports minus the economic value of its imports.

National Debt

The amount of money that the government owes its creditors.

Inflation

Widespread price increases throughout an economic system.

Unemployment

The level of joblessness among people actively seeking work in an economic system.

Recession

A period during which aggregate output, as measured by real GDP, declines.

Depression

A prolonged and deep recession.

Stability

A condition in which the amount of money available in an economic system and the quantity of goods and services produced in it are growing at about the same rate.

Stabilization Policy

Government economic policy aimed at smoothing out fluctuations in output and unemployment, and stabilizing prices.

Cyclical Unemployment

Unemployment that results from a downturn in the business cycle.