Macroeconomics

Expansion

A period in which real GDP, income, and employment rise

Stagflation

High unemployment and high inflation at the same time

The Federal Reserve

The central monetary authority of the US

Macroeconomics

The study of the economy as a whole.

Aggregate supply

The total quantity of output producers are willing and able to supply at alternative price levels in a given time period.

Fiscal policy

Use of government spending and revenue collection measures to influence the economy.

consumer price index (CPI)

a measure of the overall cost of the goods and services bought by a typical consumer

reserve requirement

a percentage of commercial banks' checking and savings accounts that must be physically kept in the bank

Depression

a sharp reduction in an economy's total output accompanied by high unemployment lasting more than a year.

recession

an extended decline in business activity

The Federal Open Market Operations Committee

decides how monetary policy should be carried out by the federal reserve

monetary policy

policies that control the supply of money, the price of money and the availability of credit.

Inflation

rise in the general level of prices.

national deficit

the difference between the amount a government brings in through taxes and sends out through spending

gross domestic product (GDP)

the dollar value of all final goods and services produced within the country's borders in a given year

open market operations

the purchase or sale of US government securities (Bonds) by the Fed

National Debt

the total amount of money owed by a nation's government to its creditors.

aggregate demand

the total demand for goods and services in the economy

cyclical unemployment

unemployment caused by a business cycle recession

Structural Unemployment

unemployment resulting from a poor match of workers' abilities and skills with current requirements of employers

economic growth

when a nation's total output of goods and services increases over time

seasonal unemployment

when people lose their jobs predictably every year at the same time

Contraction

Period of economic decline

business cycle

* the ups and downs (phases) through time of the level of overall economic activity (real GDP)

Deflation

Sustained fall in the general price level.

tight money policy

monetary policy that makes credit expensive and in short supply in an effort to slow the economy

Loose money policy

monetary policy that makes credit inexpensive an abundant, possibly leading to inflation

Frictional Unemployment

people who are temporarily between jobs (including those new to the work force)