Describe the following terms in your words. Term Definition Gross Domestic Product (GDP) Real GDP Nominal GDP Unemployment rate Inflation rate Fiscal Policy Monetary Policy Aggregat.

The Gross Domestic Product is a measure of the value of goods and services that are produced in a particular country during a certain period. In order to reflect economic growth more accurately, Real GDP is adjusted for inflation. It also takes into consideration changes in price. Nominal GDP doesn’t make any adjustments and uses the current market prices. This may include things such as increased prices due to shortages of supplies. The unemployment rate is the percent of those who actively seek employment but are unable to do so. It’s usually expressed as a proportion of the workforce. The inflation rate is the amount that prices of goods and services increase over time, reducing the buying power of the money. Fiscal Policy is the government’s spending and taxation policy that aims to achieve macroeconomic goals such as price stability, full employment, balance of payment targets, etc. Monetary Policy includes actions taken by central bankers (e.g. adjusting interest rate) to reach those same objectives. Lastly, aggregate demand refers to total spending on all goods & services within an economy during any given period which can help indicate overall economic health or provide insight into potential policy options when trying to stimulate demand.