nevertheless, she persisted.

gross national product:
total market value of all final goods & services

gross domestic product: 
total market value of all final goods & services produced w/in a country
does not include:

• work w/in homes
• second hand items
• criminal activity
• underground economies

consumer price index:
measures goods consumers buy
effects:
-purchasing power: ability to buy decreases
-positive effects: loans--> good for inflation

expansion: 

• money is flowing
• period of economic growth
• plentiful jobs & falling unemployment
• businesses investing in new plants, equipment, etc.
• inflation (general rise in prices) can occur

peak:

• real GDP stops rising
• high production
• height of expansion

contraction:

• going downhill
• lower prices occur--> deflation
• low levels of investment
• 2 types:

1. recession: real GDP fails for 2 consecutive quarters (6-18 months)
2. depression: high unemployment

trough: 

• lowest point of economic activity
• indicators:

1. leading- 
stock market
interest rates
orders of capital goods
2. coincident-
change w cycle
personal income
sales lagging

monetary policy: 
the federal reserve system = central bank of U.S.
roles of central bank:

• issues bank notes
• supervises banking institutions
• serve as bank for government & banks
• establishes & conducts monetary policy
• maintains value of currency
• acts as lender of last resort