The market value of all final goods and services produced in a country in a calendar year.

The number of people in the civilian work force over the age of 16 without jobs who are actively seeking work.

A price index that measures the cost of a fixed basket of consumer goods and services and compares the cost of this basket in one time period with its cost in some base period. Changes in the CPI are used to measure inflation.

A rise in the general or average price level of all the goods and services produced in an economy. Can be caused by pressure from the demand side of the market (demand-pull inflation) or pressure from the supply side of the market (cost-push inflation).

A decline in real GDP combined with a rise in the price level.

A schedule (or graph) that shows the value of output (real GDP) that would be PRODUCED at different price levels.

A schedule (or graph) that shows the value of output (real GDP) that would be DEMANDED at different price levels.

The type of unemployment resulting from people's present abilities, skills, training and location not matching up with available job openings that reflect the basic structure of the economy.

Unemployment caused by fluctuations in the overall rate of economic activity or phase of the business cycle.

Unemployment that is always present in the economy, resulting from temporary transitions made by workers and employers or from workers and employers having inconsistent or incomplete information.

Fluctuations in the overall rate of national economic activity with alternating periods of expansion and contraction; these vary in duration and degrees of severity; usually measured by real gross domestic product (GDP).

The height of an economic expansion, when real GDP stops rising.

A period of economic decline marked by falling real GDP.

The lowest point in an economic contraction, when real GDP stops falling

A period in a business cycle following a

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A period of economic growth as measured by a rise in real GDP.

A decline in the rate of national economic activity, usually measured by a decline in real GDP for at least two consecutive quarters (i.e., six months) .

A severe, prolonged economic contraction-A long-term economic state characterized by unemployment and low prices and low levels of trade and investment

The total amount owed by the national government to The total amount owed by the national government to those from whom it has borrowed to finance the accumulated difference between annual budget deficits and annual budget surpluses; also called public debt.

A government spends more money (expenditures) in a fiscal year than it takes in (revenue) during that time.

Changes in the supply of money and the availability of credit initiated by a nation's central bank to promote price stability, full employment and reasonable rates of economic growth.

The buying and selling of government bonds (securities) by the Federal Reserve to control bank reserves and the money supply. To increase the availability of money the Fed buys government bonds (securities). To tighten the availability of money the Fed sells bonds (securities).

The interest rate the Federal Reserve charges The interest rate the Federal Reserve charges commercial banks for loans. A change in the discount rate can either inhibit or encourage financial institutions' lending and investment activities by making it more or less expensive for them to obtain funds.

The interest rate at which a depository institution lends immediately available funds (balances at the Federal Reserve) to another depository institution overnight.

The fraction of banks' deposits that they are required by law to keep on hand or with the Federal Reserve. Lower reserve requirements mean banks can loan out a higher percentage of deposits, higher reserve requirements mean banks must keep a higher percentage of deposits in the vault.

Changes in the expenditures or tax revenues of the federal government, undertaken to promote full employment, price stability and reasonable rates of economic growth.

Funds raised through taxing and borrowing to pay for government expenditures. The amount of government taxation depends on a number of factors including political ideology, the state of the economy and the political climate.

Goods and services provided by government and paid for by taxing and borrowing. Federal government expenditures include national defense and a system of justice. State and local government expenditures include police, roads and public education. The amount of government spending depends on a number of factors including political ideology, the state of the economy and the political climate.

A seven-member committee that controls the Federal Reserve System. Also called the Federal Reserve Board, or the Fed.

Includes the purchasing of buildings, equipment, machines, tools, and inventory items for production of goods and services.

Department stores report monthly to the state commerce office its total sales of goods and services.

(economics) the utilization of economic goods to satisfy needs or in manufacturing

A decline in the price level

Income (after taxes) that is available to you for saving or spending

Monetary policy that increases the money supply

An increase in gross domestic product illustrated by an outward shift of the long run aggregate supply curve or the production possibilities curve.

The 12 member group that determines the purchase and sale policies of the Federal Reserve Banks in the market for U.S. government securities

A national banking system, established in 1913, that controls the U.S. money supply and the availability of credit in the country.

The 12 banks chartered by the U.S. government to control the money supply and perform other functions

Believe in the importance of balanced budgets and view deficit spending as irresponsible

Believe deficit spending is acceptable when it is necessary for peoples' pressing needs

Spending by the central bank an local governement on goods and services, e.g. education.

Money received, especially on a regular basis, for work or through investments / Consumption that, at the end of a period, will leave an individual with the same amount of goods (and the expectations of future goods) as at the beginning of that period. Therefore, income means the maximum amount an individual can spend during a period without being any worse off. Income (and not the GDP) is the engine that drives an economy because only it can create demand.

Deals with the economy as a whole. Macroeconomics focuses on the determinants of total national income, deals with aggregates such as aggregate consumption and investment, and looks at the overall level of prices instead of individual prices.

Commercial banks that are members of and hold stock in the federal reserve system

The amount of money the federal government spends beyond what it gathers in taxes.

Spending on domestically produced goods by foreigners (exports) minus spending on foreign goods by domestic residents (imports)

Unemployment attributable to relatively regular and predictable declines in particular industries or occupations over the course of a year, often corresponding with the climatic seasons.

monetary policy that reduces the money supply

Medium of Exchange

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Money can be used for buying and selling goods and services. If there were no money, goods would have to be exchanged through the process of barter (goods would be traded for other goods in transactions arranged on the basis of mutual need). For example: If I raise chickens and want to buy cows, I would have to find a person who is willing to sell his cows for my chickens. Such arrangements are often difficult. But Money eliminates the need of the double coincidence of wants.

Money is the common standard for measuring relative worth of goods and services.

Money is the most liquid asset (Liquidity measures how easily assets can be spent to buy goods and services). Money's value can be retained over time. It is a convenient way to store wealth.