Econ studyguide

Business Cycle

period of the GDP rises and falls

Gross Domestic Product (GDP)

the dollar amount value of all the final goods/services produced within a country’s borders in a given year

Expansion

during business cycle when GDP rise

Recession

several months decline that effects production, real, income, employment, and sales across the economy

stagflation

a combination of unemployment and sluggish economic growth, high inflation, and high unemployment

National income account

system of accounts used to measure a country’s economic performance by tracking overall production, income, and expenditures-This helps calculate GDP

GDP per capital

GDP divided by itself total population representing the average economic output per person

LAbor force

combination of employed and unemployment people

unemployment rate

Percentage of the labor force with out a paid job (unem/labor) x100

Bureau of Labor statistics

principal U.S fact finding agency for labor economic, collecting, calculating and data on, unemployment, employment, wages, and prices

frictional unemployment

when people are in search or transitioning from one job to another

structural unemployment

mismatch between jobs seekers and job available 

cyclical unemployment

joblessness caused by an economic contraction

discouraged workers

people who would like to have a job, but has given up on the search

underemployed

workers who would like to work more hours or prefers a job that better matches their skills

Normminal value

expressed in current monetary value

Real value

nominating value accounting for inflation

inflation

a rise in the price levels

deflation

process of bringing inflation rate down

hyperinflation

hgh eccelerating rates of inflation

Aggregate Price level (APL) 

measure of overall levels of prices in the economy 

Purchasing Power

the amount of g/s that can be bought with a unit of currency (real value)

spending multiplier

when HH get more disposable income resulting in consumption and saving increase

stablilization policies

government strategies that use monetary and fiscal tools to moderate economic fluctions aiming for steady growth and low inflation

fiscal policy

the use of government spending and taxation to pursue economic growth, full unemployment, and price stabilization

expansionary

increase total spending

contractionary

decrease total spending

tools of fiscal policy

gov. spending, taxation, and transfer payment

Discretionary fiscal policy

the intentional use of government spending and taxation to influence the economy, typically through new legislation

Automatic stabilizers

changes in taxation and transfers payments that moderates change in the GDP and doesn’t require authorization from the governmnet

lags in Fiscal policy

delays between when a change in gov spending or taxation is needed, when it is implemented and when it affects the economy, typically emcompassing

impacts of fiscal pollicy of Federal budget

aggregate demand, GDP growth, interest rates, and inflation

Budget surplus

difference between the amount of gov payments and the amount of government revenues in a particular year when the revenues exeed the payments

Budget Deficit

difference btween the amount of government payments and the amount of goverbment revenues in a particular year when the payment exceed the revenues