Macroeconomics The study of the determination of economic aggregates, such as
total output, total employment, the price level, and the rate of
Nominal National Income Total national income measured in current dollars. Also called
current-dollar national income.
Real National Income National income measured in constant (base-period) dollars. It
changes only when quantities change.
Business Cycle Fluctuations of national income around its trend value that follow
a more or less wavelike pattern.
Potential Output The real GDP that the economy would produce if its productive
resources were employed at their normal levels of utilization.
Also called potential GDP.
Output Gap Actual national income minus potential national income, Y - Y*.
Recessionary Gap A situation in which actual output is less than potential output, Y
Inflationary Gap A situation in which actual output exceeds potential output, Y >
Recession A downturn in the level of economic activity. Often defined
precisely as two consecutive quarters in which real GDP falls.
Employment The number of person 15 years of age or older who are not
employed and are actively searching for a job.
Unemployment Unemployment expressed as a percentage of the labour force,
Labour Force The number of persons employed plus the number of person
Unemployment Rate Unemploymen