Long-run economic growth and the short-run fluctuations in output and employment
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2
Recession
Output + living standards decline
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3
Real gross domestic product
Measures the value of final goods and services produced within the borders of a given country during a given period of time, typically a year
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4
Nominal GDP
The dollar value of all goods and services produced within the borders of a given country using their current prices during the year that they were produced
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5
Unemployment
The state a person is in if he or she cannot get a job despite being willing to work and actively seeking work
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6
household savings
Banks collect ________ + lend funds to businesses.
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7
Inflation
Increase in overall level of prices
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8
Modern economic growth
Output per person rises as compared with earlier times in which output (but not output per person) increased
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9
demand shock
Economy behaves differently based on how much time has passed after ________.
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10
Savings
Generated when current consumption is less than current output
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11
Investment
When resources are devoted to increasing future output
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12
Economic investment
Creation + expansion of business enterprises
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13
Financial investment
Purchase of assets in the hope of reaping financial gain
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14
Shocks
Situations in which firms were expecting one thing to happen but then something else happened
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15
Demand shocks
Unexpected changes in demand for goods + services
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16
Business cycle
Long-run economic growth and the short-run fluctuations in output and employment
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17
Recession
Output + living standards decline
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18
Real gross domestic product
Measures the value of final goods and services produced within the borders of a given country during a given period of time, typically a year
New cards
19
Nominal GDP
The dollar value of all goods and services produced within the borders of a given country using their current prices during the year that they were produced
New cards
20
Unemployment
The state a person is in if he or she cannot get a job despite being willing to work and actively seeking work
New cards
21
Inflation
Increase in overall level of prices
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22
Modern economic growth
Output per person rises as compared with earlier times in which output (but not output per person) increased
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23
Savings
Generated when current consumption is less than current output
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24
Investment
When resources are devoted to increasing future output
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25
Financial investment
Purchase of assets in the hope of reaping financial gain
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26
Economic investment
Creation + expansion of business enterprises
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27
Shocks
situations in which firms were expecting one thing to happen but then something else happened
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28
Demand shocks
Unexpected changes in demand for goods + services
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29
Supply shocks
Unexpected changes in supply of goods + services
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30
Inventory
Store of output that has been produced but not yet sold
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31
Inflexible (sticky) prices
Prices that cannot change rapidly in response to changes in demand
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32
Flexible prices
React within seconds to changes in supply + demand
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33
Supply shocks
Unexpected changes in supply of goods + services
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34
Inventory
Store of output that has been produced but not yet sold
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35
Inflexible prices
Prices that cannot change rapidly in response to changes in demand
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36
Flexible prices
React within seconds to changes in supply + demand
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Flashcard (132)