ECON test

Inflation

A general and progressive increase in prices

Depression

A long-term economic state characterized by unemployment and low prices and low levels of trade and investment

expansion

A period of economic growth as measured by a rise in real GDP

seasonal employment

A short-term job associated with a certain time of year.

Deflation

A situation in which prices are declining

Recession

A slowdown in a nation's economy

Hyperinflation

A very rapid rise in the price level; an extremely high rate of inflation.

Producer Price Index (PPI)

An index that measures prices at the wholesale level.

business cycle

Fluctuations in economic activity, such as employment and production

Real GDP

GDP adjusted for inflation

Trough

Lowest point of a wave

wage-price spiral

Rising wages cause higher prices and higher prices cause higher wages

cost-push inflation

When prices rise due to an increase in the cost of production.

underground economy

a market where the buyers and sellers make transactions in violation of one or more government regulations. Black market

Consumer Price Index (CPI)

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

contraction

a period of economic decline marked by falling real GDP

demand-pull inflation

inflation that is caused by an increase in aggregate demand

Non-market activities

productive activities that take place outside the GDP. volunteer work, babysitting

Real GDP per capita

real GDP divided by the total population

Cyclical Employment

result of changes in the economic and business cycles

peak

the height of an economic expansion, when real GDP stops rising

full employment

the level of employment reached when there is no cyclical unemployment

unemployment rate

the percentage of the labor force that is unemployed

Nominal GDP

the production of goods and services valued at current prices

poverty

the state of being poor

Frictional Employment

unemployment due to the time workers spend in job search

structural employment

unemployment that occurs when workers' skills do not match the jobs that are available