123752
| Question | Answer |
| macroeconomics | study of the economy as a whole, including topics such as inflation, unemployment and economic growth. |
| economic growth | the ability of the economy to produce increasing quantities of goods and services. |
| Business cycle | alternating periods of economic expansion and economic contraction relative to trend growth. |
| expansion | period of a business cycle during which total production and total employment are increasing above trend growth. |
| Recession | period of a business cycle during which total production and total employment are decreasing. |
| inflation rate | percentage increase in general price level in the economy from 1 year to the next. |
| Gross domestic product (GDP) | the market value of all final goods and services produced in a country during a period of time. |
| final good/service | new good/service which is the end product of the production process that is purchased by the final buyer. |
| intermediate good/service | good/service that is an input into another good or service. |
| value-added | the market value a firm adds to a product |
| net exports | value of exports minus value/expenditure of imports |
| transfer payments | payments by government to individuals for which government does not receive a good or service in return. |
| consumption | spending by households on goods/services, not including spending on new houses. |
| investment | spending by firms on new factories, office buildings, machinery and inventories, plus spending by households on new houses. |
| government purchases | spending by federal, state and local governments on goods and services. |
| black economy | buying and selling of goods and services that is concealed from the government to avoid taxes and regulations or because the goods and services are illegal. |
| nominal GDP | the market value of final goods/services evaluated at current year prices. |
| real GDP | a measure of the volume of final goods/services, holding prices constant. |
| economic growth rate | the rate of change of real GDP from one year to the next. |
| price level | a measure of the average prices of goods/services in the economy. |
| GDP deflator | a measure of the price level, calculated by dividing nominal GDP by real GDP and multiplying it by 100. |
| long-run economic growth | the process by which rising productivity increased the average standard of living. |
| labour productivity | the quantity of goods/services that can be produced by one worker or by one hour of work. |
| capital | manufactured goods that are used to produce other goods and services. e.g. computers, machines. |
| human capital | the accumulated knowledge and skills workers acquire from education and training or from life experiences. |
| technological change | an increase in the quantity of output firms can produce using a given quantity of inputs. generally new machinery, equipment, software. |
| Potential GDP | the level of GDP attained when all firms are producing at capacity. |
| economic growth model | a model that explains changes in real GDP per capita in the long run. |
| per-worker production function | the relationship between real GDP, or output, per hour worked and capital per hour worked, holding the level of technology constant. |
| microeconomics | study of how households and firms make choices, how they interact in markets and how the government attempts to influence their choices. |
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