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20 Cards in this Set
- Front
- Back
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Intermediate Goods |
Goods that are used to make or build another product that is subsequently sold |
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Consumption |
All expenditures made by households on goods or services during a given time period. |
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Transfer payment |
A payment made by the government that does not require an exchange of economic activity in return |
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Business fixed investments |
Purchases by firms of new capital goods such as offices, factories, tools, and machinery. |
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Net investment |
The difference between gross investment and depreciation; represents the net change in capital stock during the year. |
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Inventory investment |
Changes in inventory from one year to the next. Investment inventory is positive if firms produce more than they sell and vice versa. |
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Depreciation |
The consumption of physical capital, or the value of capital that wears out, is used up, or becomes obsolete during the year. |
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National income |
Total payments to owners of resources plus profits and losses, the sum of rent, wages, interest, and profits and losses to sole proprietors and firms. |
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Real gross domestic product per capita |
Real GDP per person, calculated as real GDP divided by the size of the population. |
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Standard of living |
The level of overall well-being enjoyed by an individual, group, or society. The standard of living is determined by anything that affects an individual's well being such as material and nonmaterial wealth, socioeconomic status, access to healthcare, and work environment |
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Growth rate |
The rate of change of a variable over a specified period of time usually expressed as a percentage change |
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Rule of 70 |
A rule of thumb used to estimate, given a constant rate of growth, how long it will take for a value to double in size where, the time to double is calculated as 70 divided by the growth rate. Generally the time to double and the growth rate are expressed in annual terms. |
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Trough |
The lowest point of economic activity in the business cycle characterized by employment and real output being at their lowest level. The trough marks the end of a recession and the beginning of an expansion. |
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Frictional Unemployment |
Unemployment resulting from workers searching and waiting for jobs. |
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Cyclical unemployment |
Unemployment resulting from fluctuations in the business cycle. |
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Discouraged workers |
Someone who wants to work but is not actively looking for a job |
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Natural rate of unemployment |
The rate of unemployment equal to the sum of the frictional and structural unemployment rates. A fully employed economy operates at this rate. |
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Consumer Price Index (CPI) |
An economic indicator used to measure over time the average price of a market basket of goods and services purchased by the typical consumer |
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Producer price index |
A price index that measures changes in prices of goods, services, and resources purchased by producers |
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Real income |
The amount of goods and services that can be purchased with nominal income, the inflation adjusted measure of income |
