Chapter 4 - measuring total production & income. Microeconomics - the study of how households and firms make choices, how they interact in markets, and how the government attempts to influence their choices. Macroeconomics - the study of the economy as a whole, including topics such as inflations, unemployment, and economic growth. Business cycle - alternating periods of economic expansion and economic recession (macroeconomic issue). Expansion - period in which production and total employment are increasing. Recession- period in which production and total employment are decreasing. Economic growth - the ability of an economy to produce increasing quantities of goods and services (macroeconomic issue). Inflation rate - the percentage increase in the price level from one year to the next (macroeconomic issue). Gdp - the market value of all final goods and services produced in a geographic area (country) during a period of time, typically one year. Includes only the market value of final goods and services.