Macroeconomics and Economic Indicators Lecture

Vocabulary terms and definitions covering macroeconomics, market types, economic systems, and economic cycles based on the lecture notes.

Macroeconomics

The study of the economy at a national and international level, regulated by macroeconomic indicators like GDP.

GDP (Gross Domestic Product)

The total market value of all goods and services produced in a country in a specific period of time, usually over $1$ year.

Unemployment

A condition occurring when someone in the age-suitable population is willing and able to work but does not have a paid job.

Inflation Rate

A statistic calculated using the Consumer Price Index that reflects an increase in the price of products and services over a period of time.

Consumer Price Index (CPI)

An index that keeps track of the price of a basket of products bought by a typical consumer to measure and reflect changes in the cost of living.

Underlying Inflation

A measure of price levels for almost everything in the economy based on the producer price index, as opposed to only the basic basket of goods.

Purchasing Power

The ability to buy goods with a salary; it is lost when inflation rises at a higher percentage (e.g., $8\%$) than the underlying inflation (e.g., $25\%$).

Free Market Economy

A capitalist system where supply and demand regulate production and labor as opposed to government intervention, characterized by consumer sovereignty and competition.

Planned Economy

Also known as a command economy, it features considerable government intervention, restricted private companies, and limited consumer choices.

Mixed Economy

An economic system that combines elements of capitalism and socialism, where the state owns infrastructure, defense, and public services alongside private enterprises.

Perfect Competition

A market type with many brands, varied price ranges, and well-informed buyers where prices are set by supply and demand.

Oligopoly

A market structure with few suppliers ($2$-$5$) who have some control over price and may engage in colluding to fix prices.

Monopoly

A market structure with only one supplier who has total control over prices, leaving buyers with no alternative choices.

Prosperity

The peak phase of the economic cycle characterized by high GDP per capita, full employment, and high demand.

Recession

A contraction phase marked by a decline in a country’s GDP for $2$ quarters, rising unemployment, and less discretionary spending.

Depression

An economic phase involving more than a six-month decline in GDP, high unemployment, and low salaries, requiring government changes in fiscal and monetary policies.

Recovery

The expansion phase where GDP steadily goes back up, unemployment falls, and leading indicators like the stock market and retail sales often rise.

INEGI

Instituto Nacional de Estadistica y Geografia; the organization associated with the data concerning the basic basket of goods in Mexico.