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business cycle
alternating periods of growth and decline in an economy's GDP
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inflation
rate or percent at which prices go up
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Gross Domestic Product (GDP)
total amount of value of goods and services produced in a country in 1 year
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Nominal GDP
does not consider inflation
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Real GDP
inflation is factored in
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Consumer Price Index (CPI)
measures the change in prices of normal household goods
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GDP Deflator
takes into account inflation
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Aggregate Supply
total amount of goods available in the USA
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Aggregate Demand
total amount of goods desired in the USA
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Macoequilibrium
aggregate supply and aggregate demand are balanced
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Demand-Pull Inflation
(prosperity) too much money and demand is high
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Cost-Push Inflation
limited supply, suppliers raise prices
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Stagnation
a period of stagnating real GDP, inflatoin, and relatively high levels of unemployment
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unemployment
people who want a job but can't find one
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circular flow of goods, services, and resources
the movement of goods and services from firms to households, and of resources from households to firms
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circluar flow of money
the movement of income in the form of resource payments from firms to households, and of income in the form of revenue from households to firms
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final good vs. intermediate good
- final: goods purchased for final use - not resale
- intermediate: goods used to produce other goods
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durable good vs. nondurable good
- durable: goods expected to last at least 1 yr
- nondurable: expecited to last less than a yr
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services
productive activites that are instantaneously consumed
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national income
the sum of all payments made to resource owners for the use of their resources
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gross national product (GNP)
total amount of value of goods and services produced in a country in 1 yr
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capital depreciation
value of existing capital to labor
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Net Domestic Product (NDP)
GDP minus capital depreciation
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personal income
national income, plus income received but not earned, minus income earned but not received
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