Recession Expansion Business cycle Business-cycle peak Business-cycle trough Long-run economic growth Inflation Deflation Price stability Open economy Trade deficit Trade surplus National income and product accounts (national accounts) Circular-flow diagram Household Firm Product market Factor market Consumer spending Stock Bond Government transfers Disposable income Private savings Financial markets Government borrowing Government purchases of goods and services Inventories Investment spending Final goods and services Intermediate goods and services Gross domestic product (GDP) Aggregate spending Value added Net exports Aggregate output Real GDP Nominal GDP Chained dollars GDP per capita Real GDP per capita | a diagram that represents the transactions in an economy by two kinds of flows around a circle: flows of physical things such as goods or labor in one direction and flows of money to pay for these physical things in the opposite direction. a loan in the form of an IOU that pays interest. 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. an organization that produces goods and services for sale. the total spending on domestically produced final goods and services; the sum of consumer spending (C), investment spending (I), government purchases of goods and services (G), and exports minus imports (X − IM). the point in time at which the economy shifts from expansion to recession. markets where goods and services are bought and sold. a period of economic upturn in which output and employment are rising; most economic numbers are following their normal upward trend; also referred to as a recovery. goods and services sold to the final, or end, user. describes a method of calculating real GDP that splits the difference between growth rates calculated using early base years and the growth rates calculated using late base years. a rise in the overall level of prices. the value of all final goods and services produced in the economy during a given year, calculated using the prices current in the year in which the output is produced. payments by the government to individuals for which no good or service is provided in return. goods and services, bought from one firm by another firm, that are inputs for production of final goods and services. the banking, stock, and bond markets, which channel private savings and foreign lending into investment spending, government borrowing, and foreign borrowing. the difference between the value of exports and the value of imports. A positive value for net exports indicates that a country is a net exporter of goods and services; a negative value indicates that a country is a net importer of goods and services. a share in the ownership of a company held by a shareholder. the average GDP per person. describes the situation in which the value of the goods and services bought from foreigners is more than the value of the goods and services sold to consumers abroad. an economy that trades goods and services with other countries. a period in which the aggregate price level is changing only slowly. the point in time at which the economy shifts from recession to expansion. GDP divided by the size of the population; equivalent to the average GDP per person. stocks of goods and raw materials held to satisfy future sales. a person or a group of people who share income. the economy’s total production of final goods and services for a given time period, usually a year. Real GDP is the numerical measure of aggregate output typically used by economists. describes the situation in which the value of goods and services bought from foreigners is less than the value of the goods and services sold to them. (of a producer) the value of a producer’s sales minus the value of input purchases. income plus government transfers minus taxes; the total amount of household income available to spend on consumption and saving. the sustained rise in the quantity of goods and services the economy produces. the short-run alternation between economic downturns, known as recessions, and economic upturns, known as expansions. total purchases by federal, state, and local governments on goods and services. spending on productive physical capital, such as machinery and construction of structures, and on changes to inventories. household spending on goods and services from domestic and foreign firms. an accounting of consumer spending, sales of producers, business investment spending, and other flows of money between different sectors of the economy. Calculated by the Bureau of Economic Analysis. the amount of funds borrowed by the government in financial markets to buy goods and services. markets in which resources, especially capital and labor, are bought and sold. the total value of all final goods and services produced in the economy during a given period, usually a year. a fall in the overall level of prices. a period of economic downturn when output and unemployment are falling; also referred to as a contraction. disposable income minus consumer spending; disposable income that is not spent on consumption but rather goes into financial markets. |
Recession
Expansion
Business cycle
Business-cycle peak
Business-cycle trough
Long-run economic growth
Inflation
Deflation
Price stability
Open economy
Trade deficit
Trade surplus
National income and product accounts (national accounts)
Circular-flow diagram
Household
Firm
Product market
Factor market
Consumer spending
Stock
Bond
Government transfers
Disposable income
Private savings
Financial markets
Government borrowing
Government purchases of goods and services
Inventories
Investment spending
Final goods and services
Intermediate goods and services
Gross domestic product (GDP)
Aggregate spending
Value added
Net exports
Aggregate output
Real GDP
Nominal GDP
Chained dollars
GDP per capita
Real GDP per capita