Crash Course Economics Episode 5

Real GDP

GDP adjusted for inflation

Nominal GDP

GDP not adjusted for inflation

Macroeconomists

make predictions based on data, theoretical models, and historical trends

frictional unemployment

unemployment that occurs when people take time to find a job

structural unemployment

unemployment that results because the number of jobs available in some labor markets is insufficient to provide a job for everyone who wants one

cyclical unemployment

unemployment that rises during economic downturns (recessions) and falls when the economy improves

Deflation

A decrease in the general price level of goods and services

3 specific measure that economists analyze to see if a country is achieving each goal are

1. Gross domestic product 2. Unemployment Rate 3. Inflation Rate

Economic goals of policy makers

1. Keep the economy growing 2. Limit unemployment 3. Keep prices stable

Examples of things NOT included in a country's GDP

1. Used Car sales 2. Stocks 3. Companies buying other companies 4. Illegal activity

Inflation

Increase in a currency supply relative to the number of people using it, resulting in rising prices of goods and services over time

unemployment rate

The number of people actively looking for a job but can't find one

The business cycle

The process of economy booms and busts

Macroeconomics

The study of the entire economy as a whole rather than individual markets

Gross Domestic Product

The sum total of the value of all the goods and services produced in a nation in a specific period of time, usually a year

Recession

When two successive quarters or 6 months show a decrease in the real GDP

Depression

a severe recession

discouraged workers

individuals who would like to work but have given up looking for a job