Macro Economics Chapter 6

Front 1

Economic aggregates:

Back 1

economic measures that summarize data across many different markets for goods, services, workers and assets.

Front 2

Business Cycle:

Back 2

the short-run alternation between economic downturns and upturns

Front 3

Depression:

Back 3

a very deep and prolonged downturn; fortunately, the United States hasn’t had one since the 1930’s

Front 4

Recessions:

Back 4

less prolonged economic downturns than depressions

Front 5

Expansions: (recoveries)

Back 5

economic upturns – periods in which output and employment are rising

Front 6

Employment:

Back 6

the number of people currently employed in the economy

Front 7

Unemployment:

Back 7

the number of people who are actively looking for work but aren’t currently employed

Front 8

Labor force:

Back 8

the sum of employment and unemployment – official labor force does not include discouraged workers

Front 9

Discouraged workers:

Back 9

non-working people who are capable of working but have given up looking for a job

Front 10

Underemployment:

Back 10

the number of people who work during a recession but receive lower wages then they would during an expansion due to fewer number of hours worked, lower paying jobs or both

Front 11

Unemployment:

Back 11

the percentage of the total number of people in the labor force who are unemployed

Front 12

Aggregate output:

Back 12

the economy’s total production of final goods and services for a given time period

Front 13

Stabilization policy:

Back 13

efforts undertaken to reduce the severity of recession and to rein in excessively strong expansions

Front 14

Monetary policy:

Back 14

a type of stabilization policy that involves changes in the quantity of money in circulation or in interest rates or both

Front 15

Fiscal policy:

Back 15

type of stabilization policy that involves changes in taxation or in government spending, or both

Front 16

Secular long-run growth / long-run growth:

Back 16

the sustained upward trend in aggregate output over several decades.

Front 17

Nominal measure:

Back 17

a measure that has not been adjusted for changes in prices over time

Front 18

Real measure:

Back 18

a measure that has been adjusted for changes in prices over time

Front 19

Aggregate price level:

Back 19

the overall price level for final goods and services in the economy

Front 20

Inflation:

Back 20

a rising aggregate price level

Front 21

Deflation:

Back 21

a falling aggregate price level

Front 22

Price stability:

Back 22

when the aggregate price level is changing only slowly

Front 23

Inflation rate:

Back 23

the annual percent change in the aggregate price level

Front 24

Closed economy:

Back 24

an economy that does not trade goods, services, or assets with other countries

Front 25

Open economy:

Back 25

an economy that trades goods, services, and assets with other countries

Front 26

Open-economy macroeconomics:

Back 26

the study of those aspects of macroeconomics that are affected by movements of goods, services, and assets across national boundaries

Front 27

Exchange rate:

Back 27

between two national currencies is the value of one currency in terms of the other

Front 28

Trade balance:

Back 28

the difference between the value of the goods and services it sells to other countries and the value of the goods and services it buys from other countries

Front 29

Capital flows:

Back 29

are international movements of financial assets