AP Macro Vocabulary

Unemployment due to the time workers spend in job search

• Frictional Unemployment

• Structural Unemployment

• Cyclical Unemployment

• Natural Rate of Unemployment

The alternation between economic downturns, known as recessions, and economic upturns, known as expansions.

• Underemployed

• Recession

• Business Cycle

• Cyclical Unemployment

Workers who would like to work more hours or who are overqualified for their jobs.

• Underemployed

• Recession

• Business Cycle

• Cyclical Unemployment

The deviation of the actual rate of unemployment from the natural rate.

• Underemployed

• Recession

• Business Cycle

• Cyclical Unemployment

A period of economic downturn when output and employment are falling.

• Underemployed

• Recession

• Business Cycle

• Cyclical Unemployment

The central bank’s use of changes in the quantity of money or the interest rate to stabilize the economy.

• Supply-Side Fiscal Policy

• Monetary Policy

• Open Market Operations

• Automatic Stabilizers

Monetary or fiscal policy that reduces aggregate demand.

• Supply-Side Fiscal Policy

• Monetary Policy

• Open Market Operations

• Contractionary

A purchase or sale of government debt (bonds/securities) by the Federal Reserve.

• Supply-Side Fiscal Policy

• Monetary Policy

• Open Market Operations

• Contractionary

Government policies that seek to promote economic growth by affecting short-run and long-run aggregate supply curves.

• Supply-Side Fiscal Policy

• Monetary Policy

• Open Market Operations

• Contractionary

The prices at which currencies trade.

• Financial Account

• Current Account

• Exchange Rate

• Foreign Exchange Market