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Glossary of Terms

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  • Balance of trade The value of exports minus the value of imports.
  • Bank rate The interest rate that the Bank of Canada charges the chartered banks on the reserves it lends them.
  • Business Cycle The periodic up-and-down movement in production.
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  • Capital The equipment, buildings, tools, and manufactured goods that are used to produce goods and services.
  • Capital investment Machinery and construction spending on items that increase the productive capacity of the economy (such as factories and roads). This also includes changes in business and government inventories which also represent investment.
  • Census This process, generally conducted once every five years, counts everyone living in Canada including non-permanent residents who hold a Ministerial permit, student authorization or employment authorization, or who claim refugee status. Also counted are citizens who are temporarily working outside the Country at the time of the Census (e.g., persons aboard merchant ships or vessels of the Canadian government, federal or provincial employees and their families, and members of the Canadian Armed Forces and their families). The census gathers comprehensive information on the socio-economic characteristics of the population at the community level. The Census results are also used in the preparation of population estimates
  • Chained dollars A method used to measure change in volume over time by adjusting for inflation. In 2002 this method replaced the previous constant dollar method used by Statistics Canada, and is also used by the United States. Chained value estimates are produced using a chained Fisher volume index. Put simply, the chain Fisher volume index is computed using a combination of two other volume indexes, Paasche volume index and a Laspeyres volume index. Essentially, the Fisher index looks to reduce the bias caused by using base year prices when calculating real GDP growth. Instead, it uses prices chained over time to compute the real growth in the value of goods and services produced. 
  • Consumer spending Spending by households on goods and services. Consumer spending is classified into four broad categories: (1) durable goods (e.g., cars and furniture) (2) semi-durable goods (e.g., clothing) (3) non-durable goods (e.g., food) and (4) services (e.g., taxis and lawyers).
  • Consumer price index An index that measures price movements in a basket of goods and services that a typical family buys. An arbitrary base year is chosen for which the index is assigned a value of 100 (presently 2002). Changes in the cost of the basket are tracked over time by comparing the index value to the base year. For example, an index number of 105 for a particular year indicates that prices have risen by 5% since the base year. Access to Statistic Canada's free Guide to the Consumer Price Index.
  • Core consumer price index This index is used by the Bank of Canada to measure inflation after removing short-term fluctuations of the more volatile components of the CPI such as fruit, vegetables, gasoline, fuel oil, natural gas, mortgage interest, intercity transportation, and tobacco products as well as the effect of changes in indirect taxes on the remaining components.



  • Demographics Characteristics of the population, such as size, age distribution, vital statistics (i.e., births, deaths), geographic dispersion and mobility (i.e., migration).

  • Discouraged worker An individual who is willing and able to work, but is not looking because he believes that no suitable work is available. Also referred to as discouraged searcher. More
  • Disposable income See personal disposable income



  • Econometrics An area of economics that combines economic theory and statistical principles/methods in order to develop mathematical estimates of key economic relationships (e.g., an estimate of the relationship between personal saving and income).
  • Economic statistics Data related to the production and consumption of goods and services in society (e.g., GDP, employment, wages and salaries).
  • Economic zone Economic zones are geographic areas defined by the 1995 Federal/Provincial Task Force on Community Economic Development to facilitate regional economic planning and development. There are currently 20 economic zones in the province. Each zone has a Regional Economic Development Board (REDB) whose job is to facilitate the development of business and economic opportunities in its area. Link to map and contact information for zones.
  • EI Employment Insurance Program. Federally managed program funded by employers and employees designed to provide individuals with: short-term income support after losing their job; re-employment services such as wage subsidies and training; and employment counselling. Previously named Unemployment Insurance Program or UI.
  • Employment Employed persons are those in the civilian population who do any work at all for pay or profit or have a job but are absent for some reason. It includes employees and self-employed people as well as unpaid family members working at a family business. People who have a job but are absent for illness, vacation, and labour disputes are included in employment. See Labour Force Survey
  • Employment Rate The ratio of employed persons to population 15 years and over. Also referred to as employment/population ratio. More



  • Goods sector Based on the North American Industry Classification System, this includes agriculture; forestry; fishing; mining; oil and gas extraction; utilities (electric power, gas and water); construction; and manufacturing. Also referred to as the Good Producing Industries.
  • Gross domestic product A measure of the value of all goods and services produced within the province in a given period. Also referred to as GDP. GDP measures the size of the economy and whether it is growing. More





  • Labour Force Everyone in the civilian non-institutional population 15 years of age and over who is willing, seeking and able to work. Essentially, it includes anyone who is employed or unemployed and actively seeking a job. The labour force is often considered the economy's labour supply.

  • Labour Force Survey Widely used source for employment and the unemployment rate. Prepared by Statistics Canada on a monthly basis. This is a household survey which dates back to 1945. More
  • Labour supply See Labour Force
  • Long-term economic forecast Predictions of economic data (e.g., GDP, employment and unemployment rate), typically for more than five years.



  • Macroeconomics The field of economics which pertains to economic aggregates or indicators (e.g., GDP, employment, personal income, unemployment rate).
  • Medium-term economic forecast Predictions of economic data (e.g., employment and unemployment rate) for a set period, usually two to five years.
  • Microeconomics Pertaining to economic entities or data at a small level of aggregation (e.g., individual firms and households).
  • Multiplier A number used to determine the impact of an event/project/industry on the economy. The ratio of total change in output or employment to the initial change (or direct change). For example, if an industry were to create 100 new jobs it would require materials and services from its supplying industries. If this increase in demand created 30 new jobs in the supplying industries, the employment multiplier would be 1.3 [i.e., 100 (direct) + 30 (spinoff)].



  • NAICS The North American Industry Classification System (NAICS) is a classification system for organizing economic data. This system replaces separate standard classification systems used by Canada, the United States, and Mexico. It provides a common standard framework for the collection of economic and financial data for all three nations.
  • NALEM The Newfoundland and Labrador Econometric Model. An econometric model managed by the provincial Department of Finance designed to capture structural economic relationships in the Newfoundland and Labrador economy. More



  • Participation Rate Labour force expressed as a percentage of the population aged 15 years and over. More

  • Personal disposable income Personal income that is actually available for consumption or saving. This is total or gross income minus income tax and social security contributions such as employment insurance and Canada Pension deductions.

  • Personal income Income received by residents or households in an area. This includes monies earned such as wages and salaries as well as transfer income such as employment insurance benefits and pension income.

  • Population estimates These are prepared by Statistics Canada on a quarterly basis. They are the official estimates used to determine provincial entitlements from federal funding programs like Equalization and the Canada Health and Social Transfer. They are also used by Statistics Canada to produce survey estimates for a range of important social and economic data (e.g., Labour Force Survey). The population estimate is higher than the Census count because it is adjusted for people missed during the Census process. Population estimates are produced between Census years by taking into account migration and birth/death data.



  • Real dollars Economists use "real" dollars, in order to make fair comparisons between time periods. Adjustments are made to data to remove the effect of changes in prices. For example, if your money (or nominal) income increased by 5 per cent while at the same time prices also increased by 5 per cent, your real income (purchasing power) would be unchanged. Real dollars incorporate only volume changes, whereas nominal dollars incorporate both volume and price changes.
  • Recession A period over which the total output of the economy declines, often measured by changes in real Gross Domestic Product. This is also referred to a contraction in the business cycle. In its simplest form a recession is defined as two consecutive quarters of decline in real Gross Domestic Product. However, in addition to GDP, some analysts use a number of other macroeconomic indicators to determine the start and end of a recession including employment growth, real income, industrial production and others.
  • Retail sales Sales before tax by businesses of merchandise and related services to the public for its use. Sales from mail order catalogues are included while direct selling is not. This definition should be distinguished from wholesale sales.



  • Seasonal adjustment Fluctuations in economic time series are caused by seasonal, cyclical and irregular movements. A seasonally adjusted series is one from which seasonal movements have been eliminated. Seasonal movements are defined as those which are caused by regular annual events such as climate, holidays, vacation periods and cycles related to crops, production and retail sales associated with Christmas and Easter. It should be noted, however, that seasonally adjusted series contain irregular as well as longer-term cyclical fluctuations.
  • Services sector Based on the North American Industry Classification System this includes trade; transportation and warehousing; finance, insurance, real estate and leasing; professional, scientific and technical services; management, administrative and other support; educational services; health care and social assistance; information, culture and recreation; accommodation and food services; other services (e.g., laundry, repair, civic organizations); and public administration. Also referred to as the Service Producing Industries.
  • Short-term economic forecast Predictions of macroeconomic indicators for the next 1-2 years.
  • Social statistics Data which describe the quality of life, environmental conditions, characteristics and customs of a population or society (e.g., literacy rates, poverty rates, education levels).



  • Unemployment Civilian non-institutional persons who are without work and are available to work. Generally, the person must also be actively searching for work to be considered unemployed. The main exceptions to the job search criteria are persons on temporary layoff with an expectation of recall and persons waiting to start a new job: these two groups would not be actively searching for a job but would be counted as unemployed. 
  • Unemployment Rate The proportion of the labour force that is unemployed. More 



  • Wholesale Sales Sales by businesses to retail sellers. Generally the distinguishing characteristic is that the goods are not sold to the end-user. Exceptions to this would be sales to end-users of certain commodities (usually capital and investment goods) such as office furniture and computers, lumber and building supplies, fuel oil and commercial vehicles which are all recorded as wholesale sales.

    Economic Research & Analysis Division, Department of Finance - (709) 729-3255 - infoera@gov.nl.ca

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