GDP
The total value of all of the goods and services produced in the economy during a given year.
What is GDP?
Simplified representation of the macroeconomy. It shows the flows of money, goods and services, and factors of production through the economy.
What is the circular-flow diagram?
GDP divided by the size of the population; it is equivalent to the average GDP per person.
What is GDP per capita?
The sum of the employed and the unemployed.
What is the labor force?
Non-working people who are capable of working but have given up looking for a job due to the state of the job marketWould like to be employed and have looked for a job in the recent past but are not currently looking for work
What are discouraged workers?
Adds up aggregate spending on domestically produced final goods and services in the economy—the sum of consumer spending, investment spending, government spending, and net exports.
What is the expenditure approach?
Where all goods and services are bought and sold.
What is a product market?
Total quantity of final goods and services produced within an economy.
What is aggregate output?
The percentage of the total number of people in the labor force who are unemployed.
What is the unemployment rate?
Would like to be employed and have looked for a job in the recent past but are not currently looking for work
What are marginally attached workers?
Adds up the total factor income earned by households from firms in the economy, including, rent, wages, interest, and profit.
What is the income approach?
Where resources, especially capital and labor, are bought and sold.
What is a resource market?
Total value of all final goods and services produced in the economy during a given year, calculated with the prices of a selected base year in order to remove the effects of price changes.
What is Real GDP?
Number of unemployed workers divided by the labor force times 100
How do you calculate the unemployment rate?
The component of overall unemployment that results directly from cycles of economic upturn and downturn.
What is Cyclical unemployment?
The approach where we calculate the GDP by adding up the contribution of each firm along the way to the total value of the final good or service.
What is the value-added approach?
Total expenditures on goods and services by federal, state, and local governments.
What is government spending?
Total value of all final goods and services produced in the economy during a given year, calculated with the prices current in the year in which the output is produced.
What is Nominal GDP?
Percentage of the population aged 16 or older that is in the labor force.
What is the labor force participation rate?
The type of unemployment that arises when workers are searching for new jobs or are transitioning from one job to another.
What is Frictional unemployment?
Goods and services bought from one firm by another firm to be used as inputs into the production of final goods and services
What are intermediate goods and services?
Households, firms, and government.
What are the three sectors of a closed economy?
Measures the reduction in the value of all of the goods and services produced in an economy when inflation is taken into account.
What is the GDP deflator?
Unemployment rate that arises from the effects of frictional and structural unemployment
What is the natural rate of unemployment?
The type of unemployment when people lack the skills required or when there are more people seeking jobs than jobs available at the current wage rate
What is structural unemployment?