Parkin Macroeconomics Ch. 4

business cycle

the periodic but irregular up-and-down movement of total production and other measures of economic activity

consumption expenditure

the total payment for consumer goods and services

cycle

a tendency for a variable to alternate between upward and downward movements

depreciation

the decrease in the value of a firm's capital that results from wear and obsolesce

expansion

a business cycle phase between a trough and a peak--a period in which real GDP increases

exports

the good and services we sell to people in other countries

final good

an item that is brought by its final user during the specified time period

government expenditure

goods and services bought by government

Gross Domestic Product (GDP)

the market value of all final goods and services produced within a country in a given time period

gross investment

the total amount spent on purchases of new capital and on replacing depreciated capital

imports

the goods and services that we buy from people in other countries

intermediate good

an item that is produced by one firm, bought by another firm, and used as a component of a final good or service

investment

the purchase of a new plant, equipment, and buildings, and additions to inventories

net exports

the value of exports of goods and services minus the value of imports of goods and services

net investment

the amount by which the value of capital increases - gross investment minus depreciation

nominal GDP

the value of final goods and services produced in a given year valued at the prices that prevailed in that same year. It is a more precise name for GDP

potential GDP

the value of production when all the economy's labor, capital, land, and entrepreneurial ability are fully employed; the quantity of real GDP at full employment

real GDP

the value of final goods and services produced in a given year when valued at the prices of a reference base year

real GDP per person

real GDP divided by the population

recession

a business cycle phase in which real GDP decreases for at least two successive quarters

time-series graph

a graph that measures time (for example, years, quarters, or months) on the x-axis and the variable or variables in which we are interested on the y-axis

trend

the tendency for a variable to move in one general direction