Macro Unit 2

the level of unemployment that prevails in an economy that is producing at its full employment level of output; includes structural and frictional unemployment

unemployment of works who have employable skills, such as those who are voluntarily moving between jobs or recent graduates who are looking for their first job

unemployment caused by a fall in aggregate demand in a nation; may signal a recession

an automatic increase in the wages of workers when inflation occurs as a result of indexing to inflation

a component of aggregate demand that equals the income earned from the sale of exports to the rest of the worlds minus expenditures by domestic consumers on imports

a model showing the short-run periods of contraction and expansion in output experienced by an economy over a period of time

the total market value of all final goods and services produced during a given time period within a country's border; equivalent to the total expenditures on the nation's output

unemployment caused by the changes in the structure of demand for goods and in technology; workers who are unemployed because they do not match what is in demand or whose skills have been left behind by economic advancement

workers who would like to work more hours (i.e. part time wanting full time) or who are overqualified for their jobs

the rapid increase in average price level resulting from demand-pull inflation leading to higher wages, causing cost push inflation

products that are purchased by producers for re-sale or further processing or manufacturing

inflation resulting from an increase in aggregate demand for more goods and products in a nation

a contraction in total output of goods and services in a nation between two periods of time; could be caused by a decrease in aggregate demand or in aggregate supply

a rise in the average level of prices in the economy over time

the spending by foreigners on domestically produced goods and services; an injection into a nation's circular flow of income

the interest rate actually paid for a loan. It includes both the real interest rate and expected inflation

the price index for all final goods and services used to adjust the nominal GDP into real GDP

an index that measures the price of a fixed market basket of consumer goods bought by a typical consumer; used to calculate inflation

a decrease in the average price level of a nation's output over time

inflation resulting from a decrease in aggregate supply and accompanied by a decrease in real output and employment; also referred to as "stagflation"