Macroeconomics Flashcards
Grade 12 · Social Studies · Flashcards
Essential macroeconomics terms for 12th grade Social Studies — GDP, inflation, policy tools, and economic cycles.
Flashcards
- Gross Domestic Product (GDP)
- The total market value of all goods and services produced within a country in a year; primary measure of economic output.
- Inflation
- Sustained increase in the general price level; reduces purchasing power. Measured by the Consumer Price Index (CPI).
- Deflation
- Sustained decrease in the general price level; can trigger economic stagnation if consumers delay spending.
- Recession
- Economic downturn defined as two consecutive quarters of negative GDP growth; marked by rising unemployment.
- Fiscal Policy
- Government use of spending and taxation to influence economic conditions; controlled by Congress and the President.
- Monetary Policy
- Federal Reserve actions to control interest rates and money supply to achieve stable prices and full employment.
- Federal Funds Rate
- The short-term interest rate banks charge each other for overnight loans; the Fed's primary monetary policy lever.
- Frictional Unemployment
- Short-term unemployment from workers transitioning between jobs; considered normal in a healthy economy.
- Stagflation
- The unusual combination of high inflation AND high unemployment; plagued the U.S. economy in the 1970s.
- Multiplier Effect
- The way government spending circulates through the economy, generating more total economic activity than the initial amount spent.
- Budget Deficit
- When government spending exceeds tax revenues in a given year; the accumulation of deficits becomes the national debt.
- Consumer Price Index (CPI)
- Measures average price changes for a basket of consumer goods and services; the main tool for tracking inflation.
Get a personalized course on Macroeconomics built around your child.