Business Cycle
The business cycle refers to the fluctuations in economic activity that an economy experiences over a period of time, typically measured by changes in real GDP. It consists of four phases: expansion, peak, contraction (recession), and trough.
Consumption
Consumption is the total value of all goods and services consumed by households. It is a major component of GDP and includes expenditures on durable goods, nondurable goods, and services.
Economic Growth
Economic growth is the increase in the production of goods and services in an economy over a period of time. It is often measured by the growth rate of real GDP.
Expansion
Expansion is a phase of the business cycle where economic activity is increasing, characterized by rising real GDP, employment, and income levels.
Final Good or Service
A final good or service is one that is consumed by the end user and does not require any further processing. It contrasts with intermediate goods, which are used as inputs in the production of other goods or services.
GDP Deflator
The GDP deflator is a measure of the price level of all domestically produced final goods and services in an economy. It is calculated by dividing nominal GDP by real GDP and multiplying by 100.
Government Purchases
Government purchases include spending by all levels of government on goods and services. This includes expenditures on defense, education, public safety, and infrastructure.
Gross Domestic Product (GDP)
Gross Domestic Product (GDP) is the total market value of all final goods and services produced within a country in a given period. It is a key indicator of a country's economic performance.
Inflation Rate
The inflation rate is the percentage increase in the price level of goods and services in an economy over a period of time. It is typically measured using the Consumer Price Index (CPI) or the GDP deflator.
Intermediate Good or Service
An intermediate good or service is one that is used as an input in the production of final goods and services. These goods are not counted directly in GDP to avoid double counting.
Investment
Investment refers to the purchase of goods that will be used to produce other goods and services in the future. It includes business investments in equipment and structures, residential construction, and changes in inventories.
Macroeconomics
Macroeconomics is the branch of economics that studies the behavior and performance of an economy as a whole. It focuses on broad aggregates such as GDP, unemployment rates, and inflation.
Microeconomics
Microeconomics is the branch of economics that studies individual agents and markets, such as households, firms, and how they make decisions regarding resource allocation.
Net Exports
Net exports are the value of a country's exports minus the value of its imports. It represents the contribution of trade to the GDP.
Nominal GDP
Nominal GDP is the market value of all final goods and services produced within a country in a given period, measured using current prices. It does not account for inflation.
Price Level
The price level is a measure of the average prices of goods and services in an economy. It is often used to gauge inflation.
Real GDP
Real GDP is the market value of all final goods and services produced within a country in a given period, adjusted for inflation. It reflects the true economic output by accounting for changes in the price level.
Recession
A recession is a phase of the business cycle characterized by a decline in economic activity, typically defined as two consecutive quarters of negative real GDP growth.
Transfer Payments
Transfer payments are payments made by the government to individuals without any goods or services being received in return. Examples include social security benefits, unemployment insurance, and welfare payments.
Underground Economy
The underground economy consists of economic activities that are not reported to the government and therefore not taxed or included in official GDP statistics. This includes illegal activities and informal work.
Value Added
Value added is the additional value created at a particular stage of production. It is calculated as the difference between the sales revenue and the cost of intermediate goods. It represents the contribution of labor and capital to the production process.
The business cycle refers to the fluctuations in economic activity that an economy experiences over a period of time, typically measured by changes in real GDP. It consists of four phases: expansion, peak, contraction (recession), and trough.
Consumption
Consumption is the total value of all goods and services consumed by households. It is a major component of GDP and includes expenditures on durable goods, nondurable goods, and services.
Economic Growth
Economic growth is the increase in the production of goods and services in an economy over a period of time. It is often measured by the growth rate of real GDP.
Expansion
Expansion is a phase of the business cycle where economic activity is increasing, characterized by rising real GDP, employment, and income levels.
Final Good or Service
A final good or service is one that is consumed by the end user and does not require any further processing. It contrasts with intermediate goods, which are used as inputs in the production of other goods or services.
GDP Deflator
The GDP deflator is a measure of the price level of all domestically produced final goods and services in an economy. It is calculated by dividing nominal GDP by real GDP and multiplying by 100.
Government Purchases
Government purchases include spending by all levels of government on goods and services. This includes expenditures on defense, education, public safety, and infrastructure.
Gross Domestic Product (GDP)
Gross Domestic Product (GDP) is the total market value of all final goods and services produced within a country in a given period. It is a key indicator of a country's economic performance.
Inflation Rate
The inflation rate is the percentage increase in the price level of goods and services in an economy over a period of time. It is typically measured using the Consumer Price Index (CPI) or the GDP deflator.
Intermediate Good or Service
An intermediate good or service is one that is used as an input in the production of final goods and services. These goods are not counted directly in GDP to avoid double counting.
Investment
Investment refers to the purchase of goods that will be used to produce other goods and services in the future. It includes business investments in equipment and structures, residential construction, and changes in inventories.
Macroeconomics
Macroeconomics is the branch of economics that studies the behavior and performance of an economy as a whole. It focuses on broad aggregates such as GDP, unemployment rates, and inflation.
Microeconomics
Microeconomics is the branch of economics that studies individual agents and markets, such as households, firms, and how they make decisions regarding resource allocation.
Net Exports
Net exports are the value of a country's exports minus the value of its imports. It represents the contribution of trade to the GDP.
Nominal GDP
Nominal GDP is the market value of all final goods and services produced within a country in a given period, measured using current prices. It does not account for inflation.
Price Level
The price level is a measure of the average prices of goods and services in an economy. It is often used to gauge inflation.
Real GDP
Real GDP is the market value of all final goods and services produced within a country in a given period, adjusted for inflation. It reflects the true economic output by accounting for changes in the price level.
Recession
A recession is a phase of the business cycle characterized by a decline in economic activity, typically defined as two consecutive quarters of negative real GDP growth.
Transfer Payments
Transfer payments are payments made by the government to individuals without any goods or services being received in return. Examples include social security benefits, unemployment insurance, and welfare payments.
Underground Economy
The underground economy consists of economic activities that are not reported to the government and therefore not taxed or included in official GDP statistics. This includes illegal activities and informal work.
Value Added
Value added is the additional value created at a particular stage of production. It is calculated as the difference between the sales revenue and the cost of intermediate goods. It represents the contribution of labor and capital to the production process.
