Economic Chapter 3 section 2
Macroeconomic
the study of the behavior and decision making of entire economies
GDP is measured in ________ not ________
Dollar terms, physical units
One way is through the American work _____
Ethic
Nonproduction transactions are ______ from GDP
Excluded
A business cycle is a period of macroeconomic _______ followed by a period of _______ or declines
Expansion, contraction
4 main parts of a business cycle
Expansion/recovery, Peak, Recession, Trough
Examples of GDP
Financial transactions and sales of items produced in previous periods
________ are subject to business cycle because economic decisions about factors such as prices, production and consumption are made by individuals and business action in their own self interest
Free enterprise systems
Policy makers pursue 3 main outcomes as they seek to stabilize the economy:
High/full employment Steady growth Stable prices
The American economy maintains a ____ standard of living, GDP Terms, than most of the world
Higher
Example of macroeconomics
Individuals, families, business, specific markets
The government provides incentives for ___
Innovation
________ products, or components of final goods and services, are excluded to avoid counting
Intermediary
Gross domestic product
The total value of all final goods and services produced in a particular economy in a year
Macroeconomics examines major ______ for the economy as a whole
Trends
A business cycle is a pattern of _____ and _____ movement of GDP over several years
Upward, downward
The value of intermediary products is already represented in the _____ of the final products
Value
Economist use GDP as one measure of an economy's __________
Well being
Business cycle
a period of macroeconomic expansion followed by a period of contraction
Work ethic
A commitment to the value of earth and purposeful activity
Recession
A decline in total output, income, employment, and trade; GDP decreases for at least two quarters in a row
Peak
Business activity reached maximum with full employment and near capacity output; GDP expansion ends, recession starts
GDP helps economists to predict ________
Business cycles
Improvements in technology allows an economy to produce ____ output from the same or a smaller quantity of ____ or resources
More, inputs
Innovation can make some production processes and workers out of date or ____
Obsolete
Expansion/ recovery
Output and employment are expanding toward full employment level; GDP increases
The government offers innovators an incentive through ____ and copyright protection
Patent
Troughs
Recession ends, expansion starts
Improved _____ is another way to increase productivity
Technology
Technology
The process used to produce a good or service
Microeconomics
The study of the economic behavior and decision making of small units
