Unit 5 Chapter 12 Gross Domestic product and growth
Real GDP
a macroeconomic measure of the value of economic output adjusted for price changes. This adjustment transforms the money-value measure, nominal GDP, into an index for quantity of total output.
GDP per capita
a measure of average income per person in a country. GDP stands for Gross domestic product.
Stagflation
a situation in which the inflation rate is high, the economic growth rate slows, and unemployment remains steadily high.
Depression
a sustained, long-term downturn in economic activity in one or more economies.
Trough
is a low turning point or a local minimum of a business cycle. The time evolution of many variables of economics exhibit a wave like behavior with local maxima (peaks) followed by local minima (troughs).
Contraction
occurs after the business cycle peaks but before it becomes a trough. According to most economists, a contraction is said to occur when a country's real GDP has declined for two or more consecutive quarters.
Capital Deepening
often measured by the rate of change in capital stock per labour hour. Overall, the economy will expand, and productivity per worker will increase.
Intermediate goods
used as inputs in the production of other goods including final goods. A firm may make and then use intermediate goods
Gross Domestic Product
Gross domestic product (GDP) is the monetary value of all the finished goods and services produced within a country's borders in a specific time period.
Recession
Period of general economic decline, defined usually as a contraction in the GDP for six months
national Income Accounting
a bookkeeping system that a national government uses to measure the level of the country's economic activity in a given time period
Business cycle
series of cycles of economic expansion and contraction.
Depreciation
the gradual decrease in the economic value of the capital stock of a firm, nation
Peak
the highest point between the end of an economic expansion and the start of a contraction in a business cycle
Expansion
the phase of the business cycle when the economy moves from a trough to a peak. It is a period when the level of business activity surges and gross domestic product (GDP) expands until it reaches a peak
Aggregate Demand
the total demand for final goods and services in an economy at a given time. It specifies the amounts of goods and services that will be purchased at all possible price levels.
Aggregate Supply
the total supply of goods and services that firms in a national economy plan on selling during a specific time period
Nominal GDP
this is gross domestic product (GDP) evaluated at current market prices, GDP being the monetary value of all the finished goods and services produced within a country's borders in a specific time period