Macroeconomics: Principles and Policy – Chapter 5: The Goals of Macroeconomic Policy

labor, machinery, buildings and other resources used to produce outputs

goods and services that the economy produces

government policy intended to make the economy grow faster in the long run

amount of output a worker turns out in an hour (or week or year) of labor; if output is measured by GDP, it is GDP per hour of work

real GDP that the economy would produce if its labor and other resources were fully employed

number of people holding or seeking jobs

volume of outputs that can be produced from given inputs given the available technology

ratio of real GDP to the populatioin

number of unemployed people, expressed as a percentage of the labor force

unemployment that is due to normal turnover in the labor market; includes people who are temporarily between jobs because they are moving or changing occupations, or are unemployed for similar reasons

refers to workers who have lost their jobs because they have been displaced by automation, because their skills are no longer in demand or because of similar reasons

unemployment attributable to a decline in the economy’s total production; rises during recession and falls as prosperity is restored

situation in which everyone who is willing and able to work can find a job

government program that replaces some of the wages lost by eligible workers who lose their jobs

volume of goods and services that a given sum of money will buy

wage rate adjusted for inflation

item’s price in terms of some other item rather than in terms of dollars

percentage increase in purchasing power that the borrower pays to the lender for the privilege of lending

percentage by which the money the borrower pays back exceeds the money that he borrowed, making no adjustment for any decline in the purchasing power of this money

notion that standards of living rise from one year to the next

in general, those who lend money are apt to be victimized by inflation, and borrowers often gain from inflation

often inaccurate prediction put forth by economists and added to the real rate of interest to get the nominal rate of interest

difference between the price at which an asset is sold and the price at which it was bought

unemployed person who gives up looking for work and is therefore no longer counted as part of the labor force