module 2 and 10 apmacroecon

national income and accounts

keeps track of the flows of money between different sectors of the economy

household

a person or group with shared income

firm

an organization that produces goods and services for sale

product markets

goods and services are bought and sold

factor markets

resources, especially capital and labor are bought and sold 

consumer spending

household spending on goods and services

stock

share in ownership of a company held by a shareholder

bond

loan in the form of an IOU that pays interest

government transfers

payments that the government makes to individuals without expecting a good service in return

disposable income

equal to income plus government transfers minus taxes

private savings

equal to disposable income minus consumer spending 

financial markets

banking, stock, bond markets, which channel private savings and foreign lending into investment spending

government borrowing

amount of funds borrowed by the government in the financial markets

government purchases of goods and services

total expenditures on goods and services by federal, state, and local governments 

exports

goods and services sold to other countries

imports

goods and services purchased from other countries

inventories

stocks of good and raw materials held to faciliate business operators 

investment spending

spending on new productive physicial capital, such as machinery and structure and on changes in inventories

final goods and services

are goods and services sold to the final, or end, user

intermediate goods and services

are goods and services bought from one firm by another firm to be used as inputs into the production of final goods and services 

gross domestic product

the total value of all final goods and services produced in the economy during a given year

aggregate spending

total spending on domestically produced final goods

net exports

difference between the value of exports and the value of imports

business cycle

short-run alteration between economic downturns

depression

very deep and prolonged downturn

recessions

periods of economic downturns when output and employment are falling

expansions

periods of economic upturns when output and employment are rising

employment

number of people currently employed in the economy

unemployment

number of people who are actively looking for work but arent currently employed

labor force

equal to the sum of employment and unemployment

unemployment rate

percentage of the labor force that is unemployed

output

quantity of goods and services produced

aggregate output

economys total production of goods and services for a given time period

inflation

rising overall price level

deflation

falling overall price level

price stability

aggregate price level is charging only slowly

economic growth

increase in the maximum amount of goods and services an economy can produce