Economics

severe worldwide economic downturn that occurring in the decade preceding WWII. 10/1929 - 1941

depositors suddenly seek to withdraw their funds from banks because they are afraid the bank will fail (go bankrupt)

an increase in real GDP(gross domestic product)

a phase of the business cycle extending from a peak to the next trough, when real GDP tends to be falling. Characterized by a significant decline in overall business activity, visible output, income, employment, and trade. Informally recessions are identified by a decline in real GDP for a least 6 months.

condition of producing significantly less than maximum possible output

Believe something is likely to happen, predict. Does not imply or assume an expected event is good or desirable.

beliefs, outlooks, or predictions about the future (optimistic, pessimistic, neutral)

someone at least 16 who worked at least 1 hour a week for pay or at least 15 hours per week in a family business

someone at least 16 who was not employed but actively looked for work (bureau of labor statistics)

the change in the number of existing jobs in a month (new jobs created - jobs lost)

number of people submitting paperwork to receive unemployment insurance benefits.

persons working part-time who would like to work full-time

the average number of weeks someone is unemployed before finding a job

percentage of the population age 16 and over that is in the labor force = number in labor force over number in working age population x 100

• 1.new entrant
• 2. re-entrant
• 3.job loser
• 4. job leaver
• 5. laid off

long term unemployment due to a mismatch between skills of of a group of job seekers and the existing job opportunities, often cause by changing types of output

the unemployment rate that would exist in the absence of cyclical unemployment

the lowest possible unemployment rate without setting of rising inflation (the non accelerating inflation rate of unemployment). this concept is part of conservative (classical) economic theory.

the amount of output produced at full employment

different population segments(social groups) characterized through statistical study

a sustained decrease in the average level of prices

a decrease in the rate of inflation

a period of inflation while economic growth is stagnant (output is not growing)

government order prohoibiting all or some types of trade with a foreign nation

the actual dollar amount received over a time period (money income)

nominal income overa time period adjusted to remove the effects of inflation. Real income shows changes in the purchasing power of someone's money income over time

the level of income where disposable income is being spent and saving is $0

independent of level of real GDP; determined by some other variable or set of decisions.

point on line where it crosses the vert. axis of a graph(and where the value being measured along the axis = 0)

C(consumption) + I (income) + G(government spending) + X(exports)

• spending multiplier equals 1 divided by mps(marginal propensity to consume plus mpi(marginal propensity to import)
• total change in income equals s.m x intial spending
• new equilibrium equals starting gdp plus the total change in income figured

gdp gap equals potential real gdp minus actual real gdp

recessionary gap equals needed change in spending equals gdp gap over s.m equals full employment output minus current AE measured at full employment Yp equals vertical distance between AE and 45 degree line at Yp.