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(NOTESWAP) econ2030 vocab all chapters

(NOTESWAP) econ2030 vocab all chapters - T EST T H REE...

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TEST THREE Chapter 22 Real gross domestic product – (Real GDP) the market value of final goods and services produced in an economy, stated in the prices of a given year. Per capita real output – real GDP divided by the total population. Keynesians – group of macroeconomists who generally favor activist government policy. Classicals – group of macroeconomists who generally favor laizzes-faire or nonactivist policies. Recession – decline in real output that persists for more than two consecutive quarters of a year. Depression – large recession Expansion – an upturn that lasts at least 2 consecutive quarters in a year. Unemployment rate – the percentage of people in the economy who are willing and able to work but who are not working. Cyclical unemployment – unemployment resulting from fluctuations in economic activity. Structural unemployment – unemployment caused by the institutional structure of an economy or by economic restructuring making some skills obsolete. Frictional unemployment – unemployment caused by people entering the job market and people quitting a job just long enough to look for and find another one. The target rate of unemployment – lowest sustainable rate of unemployment that policy makers believe is achievable given existing demographics and the economy’s institutional structure. Labor force – people in an economy who are willing and able to work. Labor force participation rate – measures the labor force as a percentage of the total population at least 16 years old.
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Employment-population ratio – the number of people who are working as a percentage of people available to work. Potential output – output that would materialize at the target rate of unemployment and the target rate of capacity utilization. Okun’s rule of thumb - +1% unemployment rate = -2% change in output. Inflation/deflation – a continual rise/fall in the price level. Price index – a number that summarizes what happens to a weighted composite of prices of a selection of goods (often called a market basket of goods) over time. GDP deflator – index of the price level of aggregate output, or the average price of the components in total output (GDP) relative to a base year. Consumer price index (CPI) – measures the prices of a fixed basket of consumer goods, weighted according to each component’s share of an average consumer’s expenditures. Personal consumption expenditure (PCE) deflator – measure of prices of goods that consumers buy that allows yearly changes in the basket of goods that reflect actual consumer purchasing habits. Producer price index (PPI) – index of prices that measures average change in the selling prices received by domestic producers of goods and services over time.
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