Macroeconomics Glossary

The total demand for all goods and services in an economy at a given overall price level and in a given time period.

The total supply of goods and services produced within an economy at a given overall price level in a given time period.

A statement of all transactions made between entities in one country and the rest of the world over a defined period.

The fluctuation of economic activity between expansion and contraction phases over time.

A national institution that manages a country's currency, money supply, and interest rates, such as the Federal Reserve or the European Central Bank.

A measure tracking changes in the price level of a weighted basket of consumer goods and services purchased by households.

A reduction in private sector spending that occurs as a result of increased government spending and the higher interest rates it causes.

Unemployment that rises during economic downturns and falls during periods of economic growth.

A general decline in prices, often associated with reduced consumer spending and economic contraction.

The value of one nation's currency expressed in terms of another nation's currency.

Government policy regarding taxation and public spending, used to influence macroeconomic conditions.

Short-term unemployment arising from the process of matching workers with jobs.

A measure of the price of all goods and services included in GDP, used to convert nominal GDP to real GDP.

The total market value of all finished goods and services produced within a country's borders in a given period.

Extremely rapid or out-of-control inflation, typically exceeding 50% per month, which can destroy a currency's purchasing power.

A sustained increase in the general price level of goods and services in an economy over a period of time.

A situation in which interest rates are low and savings rates are high, making monetary policy ineffective at stimulating the economy.

Actions by a central bank to influence the money supply and interest rates to achieve macroeconomic objectives.

The proportional increase in final income that results from an injection of spending into the economy.

The rate of unemployment consistent with a stable rate of inflation, encompassing frictional and structural unemployment.

A model showing the inverse short-run relationship between inflation and unemployment.

A monetary policy where the central bank purchases long-term securities to increase the money supply and encourage lending and investment.

A significant decline in economic activity spread across the economy, commonly defined as two consecutive quarters of negative GDP growth.

An economic condition of simultaneous stagnant growth, high unemployment, and high inflation.

Long-term unemployment caused by fundamental shifts in the economy that create a mismatch between available jobs and workers' skills.