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Gross Domestic Product (GDP)

Measures the total value of all final goods and services produced within a country's borders during a specific period.

Nominal GDP

GDP measured in current prices.

Real GDP

GDP adjusted for inflation.

Inflation

The rate at which the general level of prices for goods and services is rising, and purchasing power is falling.

Consumer Price Index (CPI)

A measure that examines the weighted average of prices of a basket of consumer goods and services.

GDP Deflator

A measure of the level of prices of all new, domestically produced, final goods and services in an economy.

Unemployment

The state of being without a job but actively searching for work.

Unemployment Rate

The percentage of the labor force that is unemployed.

Frictional Unemployment

Occurs when people are temporarily between jobs.

Structural Unemployment

Occurs due to a mismatch between the skills of the labor force and the skills demanded by employers.

Cyclical Unemployment

Occurs due to economic fluctuations (recessions).

Fiscal Policy

Government's use of spending and taxation to influence the economy.

Expansionary Fiscal Policy

Increased government spending or decreased taxes to stimulate economic growth.

Contractionary Fiscal Policy

Decreased government spending or increased taxes to slow down economic growth.

Monetary Policy

Actions undertaken by a central bank to manipulate the money supply and interest rates.