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Factors of production
All resources or inputs used to produce goods and services.
Inflationary gap
A situation where the actual real output of an economy is above its full-employment level of output, resulting in unemployment being lower than the natural rate.
Natural rate of unemployment
The level of unemployment that persists even when the economy is operating at full-employment. It consists of the sum of structural, frictional, and seasonal unemployment.
Recessionary gap
When the actual real output of an economy is below its full-employment level of output, resulting in unemployment being higher than the natural rate.