Introduction to Macroeconomics Principles

Vocabulary flashcards covering core macroeconomics concepts including worker productivity, inflation, recessions, economic policy types, and methods of economic analysis.

Macroeconomics

The major discipline in economics that examines economy-wide themes such as national income disparities, inflation, unemployment, economic growth, and stabilization policies.

Worker Productivity

The amount of output a worker can produce in a day, which determines why average income per person differs significantly between rich and poor countries.

Inflation Rate

The percentage change in the price level over time, measuring how much prices increase from year to year.

Deflation

An economic condition occurring when prices fall from year to year, resulting in a negative percentage change in the price level.

Phillips Curve

A curve that illustrates a negative relationship between the inflation rate and the unemployment rate in the short run.

Recession

A period of at least six months characterized by negative economic growth, during which economic production contracts and unemployment typically rises.

Fiscal Policy

Economic policy involving changes in government spending or tax policies, controlled in the United States by Congress and the President.

Monetary Policy

Economic policy involving the control or changing of the money supply in the economy, managed in the United States by the Federal Reserve.

Federal Reserve

The independent central bank in the United States responsible for controlling the money supply and managing monetary policy.

Positive Economics

An approach to economics based on factual statements describing how the economic system functions without making value judgments, which can be empirically proven or disproven.

Normative Economics

An approach to economics that analyzes outcomes of economic behavior and expresses value judgments or opinions, typically indicated by words like 'should', which cannot be proven or disproven.