Introduction to Macroeconomics

A single good representing the average production level of all goods and services in an economy.

The process of simplifying economic analysis by focusing on a single representative good instead of examining individual goods separately.

The general level of prices in an economy.

A general rise in the price level of goods and services.

A significant decline in economic activity characterized by high unemployment and reduced production.

The level of production of all goods and services in an economy.

The level of employment in an economy.

Groups of industries or sectors that have similar characteristics or operate in similar markets.

The study of individual markets, focusing on how consumers and producers make decisions to maximize their own well-being and profits.

Decision-makers in the economy, such as consumers, producers, or businesses, who act to maximize their own interests.

The point where the quantity of a good or service demanded by consumers equals the quantity supplied by producers.

The overall state of the national economy, considering factors like inflation, unemployment, and economic growth.

The situation where the market fails to reach an equilibrium, often due to factors like government regulation, monopolies, or incomplete information.

The idea that individuals pursuing their own self-interest in the market can lead to overall economic prosperity for society.

The study of how the entire economy functions and interacts, dealing with topics like inflation, unemployment, and GDP.

The idea that the sum of individual actions in the market can create outcomes beyond what any individual intended.

A type of economic system where businesses are privately owned and operate for profit.

Individuals who own or control a business, taking risks and making key decisions.

Resources used in the production process, including raw materials like oil and fixed assets like factories.

The income earned by selling goods or services. It covers costs and profits.

Payments made to land, capital, and labor for their contribution to production.

The earnings of entrepreneurs, representing the profit after paying all costs.

Spending by businesses to increase their productive capacity, such as buying new machinery or building factories.

The flow of money between different countries, including investments and loans.

The sector of an economy that includes all households and individuals.

The sector of an economy composed of all businesses and firms.

The sector of an economy that represents all government activities, including spending and taxation.

An economic system where most production is privately owned, takes place for market sale, uses wage labor, and involves the buying and selling of labor services.

People who work for a wage, selling their labor in exchange for payment.

The income that factors of production (like labor, capital, and land) earn through their participation in the production and sale of goods and services in a market economy.

The act of producing goods or services, involving the use of resources like labor, capital, and land to create something of value.

The economic activities that involve the buying and selling of goods and services, determining prices based on supply and demand.

A production unit in a capitalist economy, typically owned and managed by an entrepreneur. It hires wage labor and uses capital and land to produce goods and services.

The role of the state in an economy includes establishing and enforcing laws, delivering justice, and providing public services like education, healthcare, and infrastructure.

Economic activities undertaken by the state, such as taxation, spending on public goods, and production.

A group of individuals, whether a single person making decisions for themselves or a family making joint decisions, who consume goods and services, save money, and pay taxes.

The income households earn from various sources, such as working in firms, government departments, or owning businesses.

The sector of an economy that involves interaction with other countries, including buying goods and services from them (imports) and selling goods and services to them (exports).

The process of buying goods and services from other countries.

The process of selling goods and services to other countries.

The external sector impacts a domestic economy beyond just imports and exports, influencing factors like exchange rates and foreign investment.