Unit 2 Review - Top 12 Highlights from Chapter 24 (Unit 2) on the Macroeconomy

Macroeconomics

The branch of economics that studies the behavior and performance of an economy as a whole, focusing on aggregate changes.

GDP

Gross Domestic Product, a monetary measure that represents the market value of all final goods and services produced in a country during a specific period.

CPI

Consumer Price Index, a measure that examines the average change over time in the prices paid by consumers for a market basket of consumer goods and services.

National Accounts

A systematic framework for measuring the economic performance of a country, tracking the flows of money among different economic sectors.

Real GDP

The total value of the final goods and services produced in an economy during a given year, adjusted for inflation and expressed in the prices of a selected base year.

Nominal GDP

The value of all final goods and services produced in the economy during a given year, measured using the prices current in that year.

Price Index

A measure that examines the weighted average of prices of a basket of consumer goods and services, used to assess price changes associated with the cost of living.

Inflation Rate

The percentage rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.

Unemployment Rate

The percentage of the labor force that is jobless and actively seeking employment.

Frictional Unemployment

Temporary unemployment experienced by people changing jobs or entering the workforce.

Structural Unemployment

Long-term unemployment arising from changes in the economy that create a mismatch between skills and job requirements.

Cyclical Unemployment

Unemployment correlated with the economic cycle, generally rising during economic downturns and falling during economic upturns.

GDP Deflator

A measure of the price level that includes the prices of all final goods and services produced in the economy.

Chained Dollars

A method of measuring real GDP that accounts for inflation by using the average of growth rates calculated from different base years.

Disposable Income

The amount of money that households have available for spending and saving after income taxes have been deducted.

Aggregate Price Level

An overall measure of the level of prices in the economy, reflecting the average price of all goods and services.

Market Basket

A collection of goods and services used to measure the cost of living and inflation.

Producer Price Index (PPI)

An index measuring the average changes in prices received by domestic producers for their output.

Underemployment

A situation in which a person is working less than they would like or in a job that does not utilize their skills or capacities.