Glossary Terms:

Focus on Economic Data: U.S. Real GDP Growth, Final Estimate Q4 2012, March 28, 2013

Glossary terms from:
http://www.econedlink.org/e1158


Bank

A financial institution that provides various products and services to its customers, including checking and savings accounts, loans and currency exchange.

Business

Any activity or organization that produces or exchanges goods or services for a profit.

Business Cycles

Fluctuations in the overall rate of national economic activity with alternating periods of expansion and contraction; these vary in duration and degrees of severity; usually measured by real gross domestic product (GDP).

Capital

Resources and goods made and used to produce other goods and services. Examples include buildings, machinery, tools and equipment. In the context of credit transactions, capital is one of the Three Cs of Credit. It is an indicator of how creditworthy a prospective borrower is likely to be as determined by the borrower's current financial assets and net worth.

Coincident Indicators

Economic variables, such as payroll employment, industrial production, personal income, and manufacturing and trade sales, that tend to change at the same time that real output changes.

Consumers

People who use goods and services to satisfy their personal needs and not for resale or in the production of other goods and services.

Consumption

Spending by households on goods and services. The process of buying and using goods and services.

Costs

An amount that must be paid or spent to buy or obtain something. The effort, loss or sacrifice necessary to achieve or obtain something.

Credit

The opportunity to borrow money or to receive goods or services in return for a promise to pay later.

Demand

The quantity of a good or service that buyers are willing and able to buy at all possible prices during a period of time.

Durable Goods

Goods intended to last for a period of more than three years.

Exports

Goods and services produced in one nation and sold in other nations.

Federal Reserve

The central bank of the United States. Its main function is controlling the money supply through monetary policy. The Federal Reserve System divides the country into 12 districts, each with its own Federal Reserve bank. Each district bank is directed by its nine-person board of directors. The Board of Governors, which is made up of seven members appointed by the President and confirmed by the Senate to 14-year terms, directs the nation's monetary policy and the overall activities of the Federal Reserve. The Federal Open Market Committee is the official policy-making body; it is made up of the members of the Board of Governors and five of the district bank presidents.

Goal

Something a person or organization plans to achieve in the future; an aim or desired result.

Goods

Tangible objects that satisfy economic wants.

Government Expenditures

Goods and services provided by government and paid for by taxing and borrowing. Federal government expenditures include national defense and a system of justice. State and local government expenditures include police, roads and public education.

Government Spending

Spending by all levels of government on goods and services; includes categories like military, schools and roads.

Gross Domestic Product (GDP)

The market value of all final goods and services produced in a country in a calendar year.

Housing

Accommodation in houses, apartments, etc.

Imports

Goods and services bought from sellers in another nation.

Income

Payments earned by households for selling or renting their productive resources. May include salaries, wages, interest and dividends.

Inflation

A rise in the general or average price level of all the goods and services produced in an economy. Can be caused by pressure from the demand side of the market (demand-pull inflation) or pressure from the supply side of the market (cost-push inflation).

Interest

Money paid regularly, at a particular rate, for the use of borrowed money.

Interest Rate

The price paid for using someone else's money, expressed as a percentage of the amount borrowed.

Inventory

An itemized list of goods held by a person or business. Also a quantity of goods held in stock.

Investment

The purchase of capital goods (including machinery, technology or new buildings) that are used to produce goods and services. In personal finance, the amount of money invested in stocks, bonds, mutual funds and other investment instruments.

Job

A piece of work usually done on order at an agreed-upon rate. Also a paid position of regular employment.

Labor

The quantity and quality of human effort available to produce goods and services.

Labor Market

The labor supply and labor demand curves. The intersection of the labor supply and labor demand curves determines the equilibrium wage and the quantity of hours people work at this equilibrium wage.

Lagging Indicators

Economic variables such as the prime interest rate, labor cost per unit of output, inventories to sales ratio and unemployment duration that tend to change after real output changes.

Macroeconomics

The study of economics concerned with the economy as a whole, involving aggregate demand, aggregate supply, and monetary and fiscal policy.

Price

The amount of money that people pay when they buy a good or service; the amount they receive when they sell a good or service.

Product

A good or service that can be used to satisfy a want.

Production

A process of manufacturing, growing, designing, or otherwise using productive resources to create goods or services used to to satisfy a want.

Purchases

In a credit arrangement, the total amount spent during the billing cycle.

Purchasing Power

The amount of goods and services that a monetary unit of income can buy.

Real vs. Nominal

Two ways of expressing monetary values. Nominal monetary values are measured in current prices; real monetary values are measured in constant prices, that is, in prices of a given or base period. Real monetary values are obtained by adjusting nominal monetary values with an appropriate index of prices.

Recession

A decline in the rate of national economic activity, usually measured by a decline in real GDP for at least two consecutive quarters (i.e., six months).

Services

Activities performed by people, firms or government agencies to satisfy economic wants.

Stock

An ownership share or shares of ownership in a corporation.

Supply

The amount of a good or service that producers are willing and able to offer for sale at each possible price during a given period of time.

Trade

The exchange of goods and services for money or other goods and services.

Transfer Payments

Money collected by the government from one group and given to others. Examples include Social Security benefits, unemployment insurance payments and agricultural subsidies.

Unemployment

The number of people without jobs who are actively seeking work.

Workers

People employed to do work, producing goods and services.