Canadian

Securities Co urse
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co urse-349 8 20 2

Bal ance of payments Current Account

Busi ness Cycl e Cycl i cal unempl oyment

Capi tal and F i nanci al Account Unempl oyment rate

Coi nci dent i ndi cators Structural Unempl oyment

Leadi ng I ndi cators D emand-pul l i nf l ati on

Laggi ng I ndi cators D i scouraged Workers

Composi te Pri ce I ndex (CPI ) D i si nf l ati on

Cost-push i nf l ati on E qui l i bri um Pri ce

 Canadian Securities Co urse
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co urse-349 8 20 2

Account that ref l ects al l payments between Canadi ans and f orei gners f or goods,
Canada's i nteracti ons wi th the rest of the worl d whi ch are captured here i n the
servi ces, i nterest and di vi dends. Al ong wi th the capi tol and f i nanci al account i t
current account and capi tal account
i s a component of the bal ance of payments

T he recurrence of peri ods of expansi on and recessi on i n economi c acti vi ty. E ach
T he mount of unempl oyment that ri ses when the economy sof tens, f i rms' demand f or cycl e i s expected to move through 5 phases: trough, recovery, expansi on, peak,
l abour moderates, and some f i rms l ay of f workers i n response to l ower sal es. I t contracti on (recessi on). Gi ven an understandi ng of the rel ati onshi p between the
drops when the economy strengthens agai n.t busi ness cycl e and securi ty pri ces an i nvestor or f und manager woul d sel ect an
asset mi x to maxi mi z e returns.

Account whi ch ref l ects the transacti ons occurri ng between Canada and f orei gn
T he percentage of the work f orce that i s l ooki ng f or work but unabl e to f i nd j obs. countri es wi th respect to the acqui si ti on of assets, such as l and or currency. Al ong
wi th the current account a component of the bal ance of payments.

Amount of unempl oyment that remai ns i n the econmy even when the economy i s Stati sti cal data that, on average, change at approxi matel y the same ti me i n the
strong. Al so known as the nature unempl oyment rate, the f ul l empl oyment same di recti on as the economy as a whol e. (gi ves a good i dea of the current
unempl oyment rate. economi c si tuati on).

A sel ecti on of stati sti cal data that, on average, i ndi cate hi ghs and l ows of the
A type of i nf l ati on that devel ops when conti nued consumer demand pushes pri ces busi ness cycl e ahead of the economy as a whol e. T hese rel ate to empl oyment,
hi gher. capi tal i nvestment, busi ness and f ai l ures, prof i ts, stock pri ces, i nventory
adj ustment, housi ng starts and certai n commodi ty pri ces.

A sel ecti on of stati sti cal data, that on average, i ndi cate the hi ghs and l ows i n a
I ndi vi dual s that are avai l abl e and wi l l i ng to work but cannot f i nd j obs and have busi ness cycl e behi nd the economy as a whol e. T hese rel ate to busi ness
not made speci f i c ef f orts to f i nd a j ob wi thi n the previ ous month. expendi tures f or new pl ant and equi pment, consumers', i nstal ment credi t, short-term
busi ness l oans, the overal l val ue of manuf acturi ng and trade i nventori es

A decl i ne i n the rate at whi ch pri ces ri se i .e., a decrease i n the rate of i nf l ati on. T he pri ce i ndex whi ch measures the cost of l i vi ng by measuri ng the pri ces of a
Pri ces are sti l l ri si ng, but at a sl ower rate gi ven basket of goods. CPI i s of ten used as an i ndi cator of i nf l ati on.

A cost of i nf l ati on that devel ops due to an i ncrease i n the costs of producti on. F or
T he pri ce at whi ch the quanti ty demanded equal s the quanti ty suppl i ed. exampl e, an i ncrease i n the pri ce of oi l may contri bute to hi gher i nput costs f or a
company and l ead to hi gher i nf l ati on
Canadian Securities Co urse
Study this set o nline at: https://www.cram.co m/flashcards/canadian-securities-
co urse-349 8 20 2

E xchange Rate N omi nal GD P

F i nal good Output gap

F i xed E xchange Rate Regi me Parti ci pati on Rate

F l oati ng Rate Phi l i ps Curve

F ri cti onal Unempl oyment Real GD P

Gross D omesti c Product Real I nterest Rate

M onetary Aggregates Sacri f i ce Rate

N atural Unempl oyment rate Sof t Landi ng

 Canadian Securities Co urse
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co urse-349 8 20 2

GD P based on pri ces prevai l i ng i n the same year not corrected f or i nf l ati on. Al so
T he pri ce at whi ch one currency exchanges f or another
ref erred to as current dol l ar or changed dol l ar GD P

the di f f erence between the actual l evel of output and the potenti al l evel of
A f i ni shed product, one that i s purchases by the ul ti mate end user.
output when the economy i s usi ng al l avai l abl e resources of capi tal and l abour.

the share of the worki ng popul ati on (15+ and ol der) that i s i n the l abour market A country whose central bank mai ntai ns the domesti c currency at a f i xed l evel
ei ther worki ng or l ooki ng f or work. agai nst currency or a composi te of other currenci es.

A graph showi ng the rel ati onshi p between i nf l ati on and unempl oyment. T he theory
A country whose central bank al l ows market f orces al one to determi ne the val ue of
states that unempl oyment can be reduced i n the short run by i ncreasi ng the pri ce
i ts currency, but wi l l i ntervene i f i t thi nks the move i n the exchange rate i s
l evel (i nf l ati on) at a f aster rate. Conversel y, i nf l ati on can be l owered at the cost
excessi ve or di sorderl y
of possi bl y i ncreased unempl oyment and sl ower economi c growth.

GD P adj usted f or changes i n the pri ce l evel . Al so ref erred to as constant dol l ar Unempl oyment that resul ts f rom normal l abour turnover, f rom peopl e enteri ng and
GD P l eavi ng the workf orce and f rom the ongoi ng creati on and destructi on of j obs.

T he nomi nal rate of i nterest mi nus the percentage change of the CPI (i .e. the rate
T he val ue of al l goods and servi ces produced i n a country i n a year.
of i nf l ati on)

D escri bes the extent to whi ch GD P must be reduced wi th i ncreased

An aggregate that measures the quanti ty of money hel d by
unempl oyment to achi eve a 1% decrease i n the i nf l ati on rate

D escri bes a busi ness cycl e phase when economi c growth sl ows sharpl y but does Al so cal l ed the f ul l empl oyment unempl oyment rate. At thi s l evel of unempl oyment,
not turn negati ve, whi l e i nf l ati on f al l s or remai ns l ow. the economy i s thought to be operati ng at cl ose to i ts f ul l potenti al or capaci ty.