Term
| GDP- Gross Domestic Product |
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Definition
| The total income of everyone in the economy, or as the total expenditure of everyone in the economy. also the market value of all final goods and services produced within an economy in a given period of time. |
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Definition
| the value of goods and services measured at current prices |
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| the value of goods and services measured using the prices of the set base year |
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| CPI- Consumer Price Index |
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Definition
| A way to measure the total profit of an economy based upon a basket of goods, where you use the same quantity from the base year in your calculations. |
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| The amount of money spent by the government, including salaries of government workers. |
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Definition
| The amount of goods and services bought by the consumers. |
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| The total amount of investment in the economy, mainly from equipment and structures, and the inventory. |
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Definition
| The net amount between exports and imports. |
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| a way of transferring purchasing power from the present to the future |
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Definition
| provides the terms in which prices are quoted and debts recorded |
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Term
| Money- medium of exchange |
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Definition
| Money is what we use to buy goods and services |
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Definition
| money that does not have intrinsic value because it is established by governmental decree |
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Definition
Money that has intrinsic value
Gold, cigarettes in POW camps |
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Term
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Definition
M x V = P x T
T- the # of times in a year that goods or services are exchanged for money
P - number of dollars exchanged
M - quantity of money
V- velocity of money- measures the rate at which money circulates in the economy. |
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Term
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Definition
| The interest rate in which the bank pays |
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Definition
the amount increase in your purchasing power.
nominal - inflation |
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Definition
| tells us how our trade in goods and services departs from the benchmark of equal imports and exports |
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| we are net lenders in the world market- we are exporting more than we import |
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| we are net borrowers in the world market. imports are more than exports |
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Definition
| the economy is a small part of the world market, and can only have a negligible effect on the worlds interest rate. but the residents have full access to the worlds financial markets |
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Definition
The relative price of the currencies between two countries.
US dollar--Jap Yen |
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Term
| Real exchange rate or Terms of trade |
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Definition
| the relative price of the goods between two countries. the rate at which we can trade the goods of one country for the goods of another. |
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Definition
| when someone is actively searching for a job and is not employed |
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Term
| Unemployment- sectoral shift |
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Definition
| when the demand for products shift, so does the labor demand for those product, causing shifts of unemployment. |
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Definition
| the unemployment caused by the time it takes workers to search for a job |
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Definition
| inadvertantly increases unemployment by giving people money when they are unemployed therefore decreasing the will and haste to search for a job. |
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Definition
| the unemployment resulting from wage rigidity and job rationing. |
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Term
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Definition
the failure of wages to adjust to a level at which labor supply equals labor demand.
caused by minimum wage laws, unions and collective bargaining, and efficiancy wages |
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