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22 Cards in this Set
- Front
- Back
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A phase in the business cycle in which the decline in the economy's real GDP persists for at least a half-year. A recession is marked by relatively high unemployment
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Recession
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Severe recession
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Depression
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A phase in the business cycle marked by a relatively high level of real GDP, full employment, and inflation
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Prosperity
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An increase in the price level
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Inflation
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Alternating periods of growth and decline in an economy's GDP
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Business cycle
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The bottom of a business cycle
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Trough
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A phase in the business, cycle, following a recession, in which real GDP increases and unemployment declines
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Recovery
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The top of a business cycle
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Peak
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A phase in the business cycle in which real GDP declines, inflation moderates, and unemployment emerges
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Downturn
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Total value of all final goods and services, measured in current market prices, produced in the economy during a year.
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Gross Domestic Product (GDP)
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GPD measured in terms of current market prices - that is, the price level at the time of measurement.
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Nominal GDP
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GDP adjusted for changes in the price level
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Real GDP
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A measure comparing the prices of consumer goods and services that a house hold typically purchases to the prices of those goods and services purchased in a base year
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Consumer Price Index (CPI)
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The reference year in which prices in other years are compared in a price index
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Base year
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A measurement of prices in one year expressed in relation to the prices in a base year
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Price level
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A measure comparing the prices of all goods and services produced in the economy during a given year to the prices of those goods and services purchased in a base year
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GDP deflator
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The total quantity of goods and services that firms in the economy are willing to supply at varying price levels.
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Aggregate supply
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The total quantity of goods and services demanded by households, firms, foreigners, and government at varying price levels
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Aggregate demand
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The level of real GDP and the price level that equate the aggregate quantity demanded and the aggregate quantity supplied
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Macroequilibrium
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Inflation caused primarily by an increase in aggregate demand
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Demand-pull inflation
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A period of stagnating real GDP, inflation, and relatively high levels of unemployment
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Stagflation
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Inflation caused primarily by a decrease in aggregate supply
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Cost-push inflation
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