business cycle  the recurrent pattern of rising real GDP followed by falling real GDP
coincident indicator  a variable that changes at the same time that real output changes
depression  a severe, prolonged economic contraction
discouraged workers  workers who have stopped looking for work because they believe no one will offer them a job
hyperinflation  an extremely high rate of inflation
inflation  a sustained rise in the average level of prices
lagging indicator  a variable that changes after real output changes
leading indicator  a variable that changes before real output changes
nominal interest rate  the observed interest rate in the market
potential real GDP  the output produced at the natural rate of unemployment
real interest rate  the nominal interest rate minus the rate of inflation
recession  a period in which real GDP falls
underemployment  the employment of workers in jobs that do not utilize their productive potential
underground market  unreported exchanges of goods and services
unemployment rate  the percentage of the labor force that is not working