a loan in the form of an IOU that pays interest.

people who are currently holding a job in the economy, either full time or part time.

stocks of goods and raw materials held to facilitate business operations.

the difference between the value of exports and the value of imports (X − IM).

an approach to calculating GDP by surveying firms and adding up their contributions to the value of final goods and services.

a person or group of people who share income.

the deviation of the actual rate of unemployment from the natural rate.

measures the cost of purchasing a given market basket in a given year; the index value is normalized so that it is equal to 100 in the selected base year.

goods and services bought from one firm by another firm to be used as inputs into the production of final goods and services.

the economy’s total production of goods and services for a given time period.

a share in the ownership of a company held by a shareholder.

GDP divided by the size of the population; it is equivalent to the average GDP per person.

unemployment that results when workers lack the skills required for the available jobs, or there are more people seeking jobs in a labor market than there are jobs available at the current wage rate.

total expenditures on goods and services by federal, state, and local governments.

arise from the way inflation makes money a less reliable unit of measurement.

the interest rate actually paid for a loan.

keep track of the flows of money among different sectors of the economy; calculated by the Bureau of Economic Analysis.

(for a given year) 100 times the ratio of nominal GDP to real GDP in that year.

an approach to calculating GDP by adding up the total factor income earned by households from firms in the economy, including rent, wages, interest, and profit.

the total value of all final goods and services produced in the economy during a given year.

a measure of the overall level of prices in the economy.

goods and services sold to other countries.

the total value of all final goods and services produced in the economy during a given year, calculated with the prices current in the year in which the output is produced.

wages that employers set above the equilibrium wage rate as an incentive for better employee performance.

the method of calculating changes in real GDP using the average between the growth rate calculated using an early base year and the growth rate calculated using a late base year.

an approach to calculating GDP by adding up aggregate spending on domestically produced final goods and services in the economy—the sum of consumer spending, investment spending, government purchases of goods and services, and exports minus imports.

the unemployment rate that arises from the effects of frictional plus structural unemployment.

measures the cost of the market basket of a typical urban American family.

payments that the government makes to individuals without expecting a good or service in return.

the process of bringing the inflation rate down.

workers who would like to work more hours or who are overqualified for their jobs.

spending on new productive physical capital, such as machinery and structures, and on changes in inventories.

keep track of the flows of money among different sectors of the economy; calculated by the Bureau of Economic Analysis.

disposable income minus consumer spending; disposable income that is not spent on consumption but rather goes into financial markets.

the amount of funds borrowed by the government in the financial markets.

nonworking people who are capable of working but have given up looking for a job due to the state of the job market.

where resources, especially capital and labor, are bought and sold.

the number of people who are either actively employed for pay or unemployed and actively looking for work; the sum of employment and unemployment.

the nominal interest rate minus the rate of inflation.

when workers spend time looking for employment.

income plus government transfers minus taxes; the total amount of household income available to spend on consumption and to save.

the percentage increase in the overall level of prices per year.

measures the prices of goods and services purchased by producers.

the total value of all final goods and services produced in the economy during a given year, calculated using the prices of a selected base year in order to remove the effects of price changes.

the increased costs of transactions caused by inflation.

the percentage of the population aged 16 or older that is in the labor force.

people who are actively looking for work but aren’t currently employed.

would like to be employed and have looked for a job in the recent past but are not currently looking for work.

a hypothetical set of consumer purchases of goods and services.

the markets (banking, stock, and bond) that channel private savings and foreign lending into investment spending, government borrowing, and foreign borrowing.

(of a producer) the value of a producer’s sales minus the value of its purchases of inputs.

household spending on goods and services.

the total spending on domestically produced final goods and services in the economy; the sum of consumer spending, investment spending, government purchases of goods and services, and exports minus imports.

goods and services sold to the final, or end, user.

an organization that produces goods and services for sale.

the real costs of changing listed prices.

goods and services purchased from other countries.

the wage rate divided by the price level to adjust for the effects of inflation or deflation.

income divided by the price level to adjust for the effects of inflation or deflation.

the percentage of the labor force that is unemployed.

where goods and services are bought and sold.

unemployment due to the time workers spend in job search.