Macro midterm 1

• Great Depression


  Economic downturn 1929-1939 caused by poor policy making
• Macroeconomics


  Study of large-scale economy trends and governmental interventions
• Monetary Policy


  Government actions affecting economy through money quantity changes
• Fiscal Policy


  Government's spending/taxation influence on the economy
• GDP


  Gross Domestic Product, market value of final good/service produced in a country in a given period of time
• GDP Per Capita


  Output per person reflecting living standards
• Labor Productivity


  Output per worker affecting GDP per capita
• Surplus


  Exports exceeding imports in the economy
• Deficit


  Imports surpassing exports in the economy
• Normative


  Value judgment-based economic perspective
• Productivity


  Output per working individual
• Aggregation


  Combining individual economic variables for economy-wide totals
• Labor Force


  People working or actively seeking work
• Unemployment Rate


  Percentage of unemployed population in the labor force
• Labor Force Participation Rate

  Percentage of working-age population in the labor force
• Cyclical Unemployment


  Varies with economic cycles, rises during recessions
• Frictional Unemployment


  Temporary unemployment during job transitions
• Structural Unemployment


  Long-term unemployment due to social infrastructure issues
• Consumer Price Index


  Measures average price of a standard basket of goods
• Disinflation


  Slowing rate of price increase
• Deflation


  Decrease in price levels leading to production cuts and unemployment
• Positive


  Objective/fact based, clearly measurable
• Structural policy


  Government policies aimed at changing the underlying structure, or institutions, of the nation's economy.
• Intermediate good


  a good or service that is used in the process of producing other goods and services. Not calculated in the GDP, can lead to double counting.
• Capitol goods


  Long-lived goods used in the production of final goods, only included in GDP at initial purchase
• Nominal GDP


  GDP measured in current prices. Adjusted for inflation. (Can be distorted due to inflation) higher after base year and lower before base year
• real GDP


  the production of goods and services valued at a base price(measures changes in production) lower after base year and higher before base years.
• Working age population


  The total number of people aged 16-65 that are considered able to work. ( not disabled, not in military, not not in jail etc...)
• Circular flow diagram