National Income
GDP divided by the number of people in the country
What is GDP per capita?
Occurs when AD decreases below full employment level of GDP.
What is a recessionary gap?
The number of people of working age who are employed or actively seeking employment.
What is the labor force?
A sustained increase in the average price level.
A type of tax that is collected when people buy goods and services - examples include excise and sales taxes.
What is an indirect tax?
Nominal GDP what has been adjusted for changes in the price level.
What is real GDP?
This is caused by a change in interest rates, tax rates or confidence and results in a new equilibrium level of GDP.
What is a change/shift of Aggregate Demand?
Those people who are unemployed but have given up looking for work.
What are discouraged workers?
A price index created by measuring the changes in prices of a basket of goods and services most commonly purchased by households.
What is the consumer price index (cpi)?
A tax for which the percentage of income taxed increases as a person's income increases.
What is a progressive tax?
Flows of spending into the circular flow that encourage firms to produce goods - includes investment, government spending and exports.
What are injections in the the Circular Flow?
A curve which has a horizontal section to reflect the Keynesian belief that wages/costs are not flexible.
What is Keynesian Aggregate Supply Curve?
These people are either working part-time while preferring full-time or have jobs that do not make full use of the education / training.
Who are the underemployed?
This is the decrease in the rate of inflation.
What is disinflation?
A measure of income inequality derived from the Lorenz curve.
What is the Gini coefficient?
This measures the total value of goods and services produced by the nations firms regardless of where those firms are located.
What is Gross National Income (GNI)?
According to Classical Economists, this is the period of time when the prices of resources are assumed not to change.
What is the short run?
This term refers to all underemployed plus discouraged worker and those retired against their wishes.
What is hidden unemployment?
This type of inflation results from a dramatic increase in the costs of production of goods and services.
A tax for which the percentage of income taxed remains consistent at all levels of income.
What is a proportional tax?
The total number of goods and services that MAY be produced given the scarcity of land, labor and capital.
What is full potential GDP?
According to the Classical model, the only long run impact of a change in AD.
What is a change in the price level?
This is the belief that there is some level of unemployment that must exist to prevent inflation.
What is the natural rate of unemployment?
This version of a CPI omits energy and food because of their volatility.
What is the Core rate of inflation?
What is relative poverty?