Ch. 22

• What is long-run economic growth?

  Expansion of the productive capacity of an economy
• What is short-run economic growth?

  An increase in actual GDP
• What does nominal value represent?

  Value based on current prices, ignoring changes
• How does real value differ from nominal value?

  Real value accounts for changing prices over time
• What is real GDP?

  GDP at constant prices, adjusted for inflation
• What is nominal GDP?

  GDP at current prices, not adjusted for inflation
• What does gross national income (GNI) include?

  GDP plus net income from abroad
• What is seasonal adjustment?

  A process to smooth seasonal fluctuations in data
• What does GDP per capita measure?

  The average level of GDP per head
• What is productivity?

  Measure of efficiency of a factor of production
• What is labour productivity?

  Output per worker or per hour worked
• What is capital productivity?

  Output per unit of capital
• What is total factor productivity?

  Average productivity of all factors of production
• What is human capital?

  Stock of skills and expertise of workers
• What is the economic cycle?

  Fluctuations of GDP around its underlying trend
• What defines a recession?

  Real GDP falls in two consecutive quarters