Foundational AP Macroeconomics vocabulary spanning GDP, inflation, unemployment, and fiscal and monetary policy. Front: the term. Back: a plain-language definition.
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- Gross Domestic Product (GDP)
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The total market value of all final goods and services produced within a country during a specific period, usually one year.- Real GDP
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Gross domestic product adjusted for inflation, measured in constant dollars from a base year, showing actual changes in production.- Nominal GDP
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Gross domestic product measured in current prices without adjustment for inflation, reflecting both price and quantity changes.- GDP per Capita
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A country's real GDP divided by its population, measuring average economic output per person.- Gross National Product (GNP)
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The total market value of all final goods and services produced by a country's residents, regardless of location, during a specific period.- Consumer Price Index (CPI)
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A measure of the average change in prices paid by consumers for a fixed basket of goods and services over time.- Inflation
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A sustained increase in the general price level of goods and services in the economy over time.- Deflation
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A sustained decrease in the general price level of goods and services in the economy over time.- Disinflation
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A decrease in the rate of inflation, meaning prices are still rising but at a slower pace than before.- Stagflation
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An economic condition characterized by simultaneous economic stagnation and high inflation occurring at the same time.- Unemployment Rate
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The percentage of the labor force that is actively seeking work but currently without a job.- Frictional Unemployment
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Unemployment occurring when people are temporarily between jobs or searching for work due to normal labor market transitions.- Structural Unemployment
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Unemployment resulting from a mismatch between skills workers possess and skills demanded by employers, or from geographic mismatch.- Cyclical Unemployment
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Unemployment that fluctuates with the business cycle, rising during recessions and falling during economic expansions.- Natural Rate of Unemployment
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The unemployment rate that exists when the economy is at full employment, consisting only of frictional and structural unemployment.
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