Macroeconomics

The total demand for all goods and services in an economy at a given price level and time period, comprising consumption, investment, government spending, and net exports.

The total output of goods and services that firms in an economy are willing to produce at various price levels during a given time period.

A set of government policies aimed at reducing budget deficits through spending cuts, tax increases, or both, typically during periods of fiscal stress.

A comprehensive record of all economic transactions between residents of a country and the rest of the world during a specific period.

The difference between the value of a country's exports and imports over a given period.

The benchmark interest rate set by a central bank that influences all other interest rates in the economy.

The recurring pattern of expansion and contraction in economic activity, typically measured by changes in real GDP and employment.

A component of the balance of payments that records capital transfers and the acquisition or disposal of non-financial assets between countries.

A national institution responsible for managing a country's monetary policy, regulating banks, maintaining financial stability, and issuing currency.

A survey-based economic indicator measuring consumers' optimism about the economy, personal finances, and spending intentions.

A measure of inflation that excludes volatile food and energy prices to reveal underlying, persistent price trends in the economy.

Inflation caused by rising production costs (wages, raw materials, energy) that businesses pass on to consumers through higher prices.

A measure of the average change in prices paid by urban consumers for a basket of goods and services, used as the primary gauge of inflation.

The phenomenon where increased government spending or borrowing reduces private sector investment by raising interest rates.

A component of a country's balance of payments that records trade in goods and services, net income from abroad, and net transfer payments.

A metric comparing a country's total government debt to its gross domestic product, indicating the nation's ability to repay its obligations.

A sustained decrease in the general price level of goods and services, resulting in increasing purchasing power of money.

Inflation caused by aggregate demand growing faster than aggregate supply, often described as "too much money chasing too few goods."

A severe and prolonged economic downturn characterized by massive declines in output, employment, and economic activity lasting years.

A decrease in the rate of inflation — prices still rise but at a slower pace than before.

The increase in the production of goods and services in an economy over time, typically measured by the growth rate of real GDP.

A statistical data point used to measure and assess the current state or future direction of economic activity.

The system a country uses to manage its currency's value relative to other currencies.

The interest rate at which banks lend reserve balances to each other overnight, set as a target range by the Federal Reserve.

The central banking system of the United States, responsible for monetary policy, bank regulation, and financial stability.

The ratio measuring how much GDP changes in response to a change in government spending or taxation, indicating the effectiveness of fiscal policy.

Government decisions about taxation and spending used to influence economic conditions and achieve macroeconomic goals.

An economic condition where all available labor resources are being used efficiently, with unemployment at its natural rate.

The total monetary value of all finished goods and services produced within a country's borders in a specific time period.

A price index that measures the overall level of prices for all goods and services produced in an economy, used to convert nominal GDP to real GDP.

A country's total economic output divided by its population, used as a measure of average living standards.

A statistical measure of income or wealth inequality within a population, ranging from 0 (perfect equality) to 1 (maximum inequality).

An economic scenario where aggressive tightening by a central bank triggers a recession while attempting to control inflation.

Extremely rapid and out-of-control inflation, typically exceeding 50% per month, that destroys a currency's purchasing power.

A publicly announced goal for the rate of inflation that a central bank aims to achieve, typically around 2% in advanced economies.

The difference in interest rates between two countries or two financial instruments, influencing capital flows and currency values.

An economic theory stating that the difference in interest rates between two countries equals the expected change in exchange rates between their currencies.

An economic theory advocating government intervention through fiscal policy to manage aggregate demand and stabilize economic cycles.

The percentage of the working-age population that is either employed or actively seeking employment.

A theoretical relationship showing that there is an optimal tax rate that maximizes government revenue — too high or too low both reduce collections.

An economic metric that changes after the economy has already begun to follow a particular trend, confirming rather than predicting patterns.

Statistical measures that tend to change before the overall economy shifts, used to predict future economic activity.

A situation where interest rates are near zero and monetary policy becomes ineffective because people hoard cash rather than spending or investing.

An economic metric calculated by adding the unemployment rate to the inflation rate, indicating the overall economic discomfort felt by citizens.

The total amount of currency in circulation plus reserves held by commercial banks at the central bank — the foundation of the money supply.

Actions by a central bank to manage the money supply and interest rates to achieve macroeconomic objectives like stable prices and full employment.

The total amount of money available in an economy at a given time, measured in categories like M1 (cash and checking) and M2 (M1 plus savings and time deposits).

The total amount of money a government owes to creditors, accumulated from annual budget deficits over time.

The unemployment rate that exists when the economy is at full employment, consisting only of frictional and structural unemployment.

Gross domestic product measured at current market prices without adjusting for inflation.

Monthly U.S. jobs report measuring employment changes excluding farm workers, government employees, and nonprofit organization employees.

An empirical relationship stating that for every 1% increase in unemployment above the natural rate, GDP falls approximately 2% below its potential.

The buying and selling of government securities by a central bank to control the money supply and influence interest rates.

An economic model showing an inverse relationship between unemployment and inflation, suggesting policymakers face a trade-off between the two.

A monthly survey-based indicator measuring the economic health of the manufacturing or services sector, where readings above 50 indicate expansion.

A measure of average price changes received by domestic producers for their goods and services, often considered a leading indicator for consumer inflation.

An economic theory that compares currencies based on how much a standardized basket of goods costs in each country.

An unconventional monetary policy where a central bank purchases government bonds and other securities to increase money supply and lower long-term interest rates.

The process by which a central bank reduces its balance sheet by allowing bonds to mature without reinvestment or actively selling assets.

Gross domestic product adjusted for inflation, measuring the actual volume of goods and services produced in an economy.

Nominal values are measured in current prices without inflation adjustment, while real values are adjusted for inflation to reflect actual purchasing power.

A significant, widespread, and prolonged decline in economic activity, commonly defined as two consecutive quarters of negative GDP growth.

The minimum percentage of deposits that a bank must hold as reserves rather than lending out, set by the central bank.

An economic scenario where a central bank successfully slows growth enough to reduce inflation without triggering a recession.

An economic condition combining stagnant growth, high unemployment, and high inflation simultaneously.

The fundamental economic model describing how the quantity of goods available and buyer desire for them determine market prices.

An economic theory arguing that tax cuts, deregulation, and policies that increase production capacity drive economic growth more effectively than demand-side stimulus.

A tax imposed by a government on imported goods and services, used to protect domestic industries or as a trade policy tool.

A formula that suggests how central banks should adjust interest rates based on deviations of inflation and output from their targets.

A situation where a country's imports of goods and services exceed its exports, resulting in a negative balance of trade.

An escalating economic conflict between countries involving retaliatory tariffs, quotas, and trade barriers designed to harm each other's exports.

The return an investor earns by holding a U.S. government Treasury security to maturity, serving as a benchmark for interest rates across the economy.

The percentage of the labor force that is jobless and actively seeking employment, a key indicator of economic health.

The rate at which money changes hands in an economy, measuring how frequently a unit of currency is used to purchase goods and services.

The rate of increase in worker compensation over time, a key indicator of labor market strength and potential inflationary pressure.

An unusual situation where short-term government bonds yield more than long-term bonds, historically a reliable predictor of economic recessions.

A monetary policy strategy where a central bank sets its benchmark interest rate at or near zero to stimulate economic activity.