Hysteresis describes a situation where high unemployment remains high for a long time and becomes difficult to fix,
Glossary Category: Macroeconomy
disequilibrium unemployment
Disequilibrium unemployment happens when the labor market is not balanced, meaning the number of people looking for work
equilibrium unemployment
Equilibrium unemployment is the level of unemployment that occurs when the labour market is balanced, meaning the number
automatic stabilisers
Automatic stabilisers are government fiscal systems that help balance the economy without requiring new laws or direct action
output gap
The output gap measures the difference between an economy’s actual production (Actual GDP) and its potential output (Potential
negative output gap
A negative output gap happens when a country’s actual economic production is lower than its potential output. This
positive output gap
A positive output gap happens when a country’s actual economic production is higher than its potential output. This
national output
National output is the total value of all finished goods and services made within a country’s economy during
deflationary gap
A deflationary gap (also known as a recessionary gap) occurs when an economy’s actual national income is lower
inflationary gap
An inflationary gap occurs when an economy’s total demand is higher than its maximum sustainable capacity. This means