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AP MACRO
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Term | Definition |
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Inflation | is the sustained increase in the general price level of goods and services in an economy, resulting in a decrease in the purchasing power of money. |
Unemployment | to the number of people who are willing and able to work but cannot find employment, typically expressed as a percentage of the labor force. |
Macroeconomics | Is the study of the economy as a whole. Unemployment, inflation, and economic growth |
Microeconomics | The study of how households and firms make decisions and how they interact in markets. |
Total income | the sum of all earnings and payments received by individuals and businesses within an economy during a specific period, including wages, salaries, rents, and profits. |
Total expenditure | Total expenditure represents the sum of all spending on goods and services by households, businesses, and the government within an economy over a given time frame. |
Gross domestic product | Is the market value of all final goods and services produced within a country in a given period of time. |
Intermediate production | refers to the creation of goods or services that are used as inputs in the production of other goods or services, rather than being sold directly to consumers. |
Final production | represents the goods and services that are sold to end consumers and are not used as inputs in the production of other goods and services. |
Gross national product | the total value of all goods and services produced by a country's residents and businesses, both domestically and abroad, in a specific time period. |
Depreciation | the gradual decrease in the value of physical assets, such as machinery or buildings, over time due to wear and tear, obsolescence, or other factors. |
Consumption | Is spending by households on goods and services, The exception of purchases of new housing. |
Investment | Is the purchase of goods that will be used in the future to produce more goods and services. (Spending on capital equipment, inventories and structures, including household purchases of new housing. |
Government purchases | Include spending on goods and services by local, state, and federal governments. |
Net exports | Equal the purchases of domestically produced goods by foreigners (exports) minus the domestic purchases of forgien goods(imports). |
Transfer payment | are payments made by the government to individuals, households, or businesses for purposes such as welfare, social security, or subsidies, without receiving goods or services in return. |
Real GDP | Is the production of goods and services valued at constant prices |
Nominal GDP | Is the production of goods and services valued at current prices. |
Base year | is a reference year used in calculating economic indicators like inflation and real GDP, against which other years are compared to measure changes in prices and economic performance. |
Recession | a significant and sustained decline in an economy's overall economic activity, typically characterized by a decrease in GDP, rising unemployment, and reduced consumer and business spending. |
GDP deflator | A measure of the price level calculated as the ratio of nominal GPD / Real GPD x 100 |