Economics: Macroeconomics

Front 1

Nominal

Back 1

NOW (at current market prices)

Front 2

Real

Back 2

Taking into consideration inflation

Front 3

Circular Flow Model

Back 3

The interrelationship between businesses, households, and the government

Front 4

Consumption

Back 4

Individual spending

Front 5

Gross Investment

Back 5

Investing in the market, infrastructure, or saving

Front 6

Government Spending

Back 6

The spending the government does (even if it is deficit spending)

Front 7

Net Exports

Back 7

Exports minus imports

Front 8

Factors of GDP

Back 8

Consumption, Gross Private Investment, Government Spending, and Net Exports

Front 9

GDP

Back 9

Market value of all final goods and services produced in a nation within a year

Front 10

Business cycle

Back 10

The natural ups and downs of the economy

Front 11

Peak

Back 11

Temporary maximum in Real GDP. At this point the unemployment rate (u%) is probably below the natural rate of unemployment, and the inflation rate (?%) is probably increasing

Front 12

Recession

Back 12

The contractionary phase of the business cycle. A period of decline in Real GDP accompanied by an increase in u%. To be classified as a recession, the economic decline must be at least 6 months long

Front 13

Trough

Back 13

The bottom of the business cycle. The u% is probably high and ?% is probably low

Front 14

Employed

Back 14

People 16 years and older that have a job

Front 15

Not in labor force

Back 15

Kids, military personnel, retired people, stay at home Moms and Dads, full-time students, your 40 year old uncle who sleeps on the couch all day, most of the homeless

Front 16

Unemployed

Back 16

People 16 years and older that don’t have a job, but have actively searched for a job in the last 2 weeks

Front 17

Labor force

Back 17

Number of people in a country that are classified as either employed or unemployed

Front 18

Frictional unemployment

Back 18

“between jobs”, voluntary, good for individuals and society

Front 19

Structural unemployment

Back 19

Associated with lack of skills or declining industry (ex. High school dropouts, type-writer repairmen).

Front 20

Cyclical unemployment

Back 20

Associated with downturns in business cycle. Bad for society and individuals

Front 21

Seasonal unemployment

Back 21

Mall Santas, Schlitterbahn Life-guards, Ride operators at Fiesta Texas, Golf-pros in Alaska during January

Front 22

Okun's Law

Back 22

Every 1% increase in the u% causes a 2% decline in Real GDP

Front 23

Inflation

Back 23

Occurs when the economy’s overall price level is rising

Front 24

Consumer price index

Back 24

A measure of the overall cost of the goods and services bought by a typical consumer

Front 25

Product market

Back 25

Where goods and services are exchanged

Front 26

Factor market

Back 26

Where the factors of production are exchanged