chapter 5: Introduction to Macroeconomics

These flashcards cover key vocabulary and concepts in macroeconomics as discussed in the lecture notes.

Macroeconomics

The branch of economics that focuses on aggregate measures such as national income, overall price levels, and total employment.

Inflation

A general increase in the aggregate price level of goods and services.

Unemployment

The percentage of the labor force that is unemployed.

Deflation

A general decrease in the aggregate price level.

Business cycle

Fluctuations in economic activity typically characterized by periods of expansion and contraction.

Fiscal policy

Government policy regarding taxation and spending to influence economic activity.

Monetary policy

Central bank actions that manage the money supply and interest rates to influence economic activity.

Expansionary policy

A type of fiscal or monetary policy aimed at increasing economic growth.

Contractionary policy

A type of fiscal or monetary policy aimed at slowing down economic growth.

Keynesian theory

An economic theory that emphasizes the role of aggregate demand in influencing economic activity, particularly during recessions.

Sticky prices

Prices that are slow to change despite shifts in supply and demand conditions.

Recession

A period during which aggregate output declines.

Stagflation

An economic condition characterized by high inflation and high unemployment.

Aggregation

The process of combining various elements into a single measure or representation in economics.

Circular flow model

A model that represents the exchange of money, goods, and services among households, firms, and the government.

Economic sectors

The divisions of an economy that include households, firms, government, and the rest of the world.

Business cycle phases

The four phases include peak, recession, trough, and expansion.

Transfer payments

Payments made by the government to individuals, not in exchange for goods or services.

Macroeconomic aggregates

Overall measures in the economy like GDP, total employment, and total income.

Aggregate output

The total amount of goods and services produced in an economy.