Econ Unit 4 Vocab

underground economy

unreported legal and illegal activities that do not show up in GDP statistics

GDP (Gross Domestic Product)

The total value of goods and services produced within a country's borders in a given time period, typically a year.

real GDP

GDP after adjustments for inflation, GDP in constant dollars

per captia

per person basis, total divided by population

standard of living

quality of life based on ownership of necessities and luxuries that make life easier

producer price index

index used to measure prices received by domestic producers

unemployment rate

ratio of unemployed individuals divided by the total number of persons in the civilian labor force

frictional unemployment

unemployment caused by workers changing jobs or waiting to go to new ones

seasonal unemployment

unemployment caused by annual changes in the weather

intermediate products

products excluded from GDP because they are components of final products included in GDP

trend line

growth path the economy would follow if it were not interrupted by alternating period of recession and recovery

index of leading indicators

composite index of 11 economic series that move up and down in advance of changes in the overall economy; used to predict business changes

GNP (Gross National Product)

total dollar value of all goods, services, and structures produced in one year with labor and property supplied in a country’s residents; largest measure of a nation’s income

inflation

rise in the general level of prices

price index

statistical series used to measure changes in the prices level over time

business cycle

systematic changes in real GDP marked by alternating periods of expansion and contraction

recession

decline in real GDP lasted at least 2 quarters or more

structural unemployment

unemployment caused by a fundamental change in the economy that reduces the demand for workers

cyclical unemployment

unemployment directly related to swings in the business cycle

hyperinflation

abnormal inflation in excess of 500% per year; last stage of a monetary collapse

expansion

period of growth of real GDP; recovery from recession

current GDP

GDP measured in current prices, unadjusted for inflation

deflation

decrease in the general level of prices of goods and services

CPI (Consumer Price Index)

index used to measure price changes for a market basket of frequently used consumer items

base year

year serving as a point of comparison for other years in a price index or other statistical measure

depression

state of economy with large numbers of unemployed, declining real incomes, overcapacity in manufacturing plants, general economic hardship

disinflation

reduction in the rate of inflation

technological unemployment

unemployment caused by technological developments or automation that makes some worker’s skills obsolete

market basket

representative collection of good and services used to compile a price index

census

complete count of population including place of residence