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)