Business Cycle - the short term ups and downs in actual real GDP
Consumer Price Index (CPI) - a measure of the overall price level for consumers
Consumer Spending - all the money that households spend on goods and services
Cyclical Unemployment - when people are unemployed due to economic contraction in the business cycle
Deflation - decreasing prices
Disinflation - prices increasing at a decreasing rate
Employment Cost Index (ECI) - a measure of the overall labor cost level for employers
Expenditures - spending money
Exports - producing and selling goods to another country
Frictional Unemployment - when people are unemployed because they are changing jobs
Full Employment - another term for the natural rate of unemployment - an appropriate amount of unemployment
GDP Deflator - a tool used to adjust between nominal and real GDP
Gross Domestic Product (GDP) - the dollar value of all measurable economic activity in a country or place
Households - people who control their own labor and resources, and consume goods and services
Imports - buying goods from another country and bringing them into yours
Inflation - increasing prices
Inflation Rate - the percent change in the price level over a given time period (often one year)
Interest Rate - the amount of additional money paid back to lenders, usually as a percent per year
Intermediate Goods - partially completed products that are not ready to be sold to consumers
Investment Spending - all the money that businesses spend on capital and inventory
Labor Force - all the people in an economy who are willing and able to work
Labor Force Participation Rate - Labor Force / Potential Labor Force (potential = all the people able to work)
Menu Costs - the cost of having to adjust your prices due to inflation
Natural Rate of Unemployment - the structural + frictional unemployment rate (considered "good" unemployment)
Nominal - only considering the change in amount of money
Producer Price Index (PPI) - a measure of the overall price level for producers
Purchasing Power - how much stuff someone is able to buy
Recession - 6 months or more of falling real GDP
Real - adjusted for inflation / changes in the price level
Real Interest Rate - the interest rate, adjusted for inflation
Shoe Leather Costs - the cost of spending additional time managing money due to inflation
Structural Unemployment - when people are unemployed because their skills used to be valuable, but are not now
Unemployment - when people who are in the labor force are not working but want to work