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