Macroeconomics terms

Economic Terms - Great Depression

Laissez-faire: Minimal government intervention in the running of the economy 

Revenue: Money taken in by the government

Expenditures: Money spent by the government

Balanced Budget: When expenditures and revenues are equal

Deficit: When expenditures exceed the revenue 

Market economy: When individuals (Producers/Consumers) determine if something is made and the price.  

Capitalism: Private individuals and business firms carry out production and exchange of goods through a network of markets. 

Supply: Availability of a particular product or commodity 

Demand: How badly people want products and services

Law of Supply & Demand: Too much supply of a product lowers the price; and great demand highers the price. 

Budget: Spending plan of the government (Expenditures and revenues represent priorities of the government) 

Boom: A period in the business cycle of extreme poverty 

Bust: A prolonged recession (Economic activity is on a decline) 

Depression: A period in the business cycle of a serious downturn

Economic Terms - AP Macroeconomics

GDP (Gross Domestic Product) – The total value of all goods and services produced in a country annually.
Unemployment Rate – The percentage of the labor force that is jobless and actively looking for work.
Inflation – The general rise in prices of goods and services over time.
Monetary Policy – The process by which the central bank (like the Bank of Canada) controls the money supply and interest rates to influence the economy.
Fiscal Policy – Government decisions on spending and taxation are used to influence economic activity.
Aggregate Demand – The total demand for goods and services in an economy at a given price level and time.
Aggregate Supply – The total output an economy’s producers are willing and able to supply at a given price level.
Interest Rate – The cost of borrowing money, often set or influenced by a central bank.
Budget Deficit – When a government spends more money than it collects in taxes.
Balance of Trade – The difference between a country's exports and imports of goods and services.
Currency Exchange Rate – The value of one country’s currency in terms of another's.
Recession – A period of economic decline lasting at least two quarters, marked by reduced GDP and rising unemployment.
Stagflation – A situation where inflation and unemployment rise at the same time.
Multiplier Effect – The idea that an initial change in spending leads to a larger overall impact on the economy.
Supply Shock – A sudden change in the availability of a good or service, which can affect prices and output.