Help
Options
Term
GDP (Gross Domestic Product)
click to flip
Didn't know it?
click below
click below
Knew it?
click below
click below
Don't know
Term
ways to compute GDP
Remaining cards (28)
Know
retry
shuffle
restart
0:00
Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.
Normal Size Small Size show me how
Normal Size Small Size show me how
ECON 1 test 3 ch 7
macroeconomics ch 7 GDP & Real GDP
| Term | Definition |
|---|---|
| GDP (Gross Domestic Product) | total market value of all fixed goods & services produced annually w/in a country's border w/in a given yr; geography matters; in calc 0 trade balance, - trade deficit, + trade surplus |
| ways to compute GDP | 1. Income Approach - add the amt of money spent by buyers of final goods & services; 2. Value-Added Approach- add up all the steps; 3. Expenditure Approach- add the amt of money spent by buyers of final goods & services |
| GDP calculation | GDP = C+I+G+Nx (open economy) w/o Nx (closed economy); C = consumers (market basket), I = investments (business spending on businesses ie. labor, construction, etc), G = gov't (spending, not transfers), Nx = (exports - imports) |
| not included in GDP | non-market goods (household prod), underground activities, sales of used goods themselves, intermediate goods, financial trans (trading stocks/bonds), gov't transfer payments (ss cks, vet benefits), leisure (vol time off) |
| final goods | a good in the hands of the final user |
| intermediate good | a good that is an input to the production of a final good |
| double counting | counting a good more than once when computing GDP |
| transfer payment | a payment to a person that is not made in return for goods & services currently supplied |
| consumption | the sum of spending on durable goods, nondurable goods, & services |
| investment | the sum of all purchases of newly produced capital goods, changes in business inventories, & purchases of new residential housing |
| inventory investment | changes in the stock of unsold goods |
| fixed investments | business purchases of capital goods ie. machinery & factories, & purchases of new residential housing |
| government purchases | federal, state, & local gov't purchases of goods & services & gross investment in highways, bridges, & so on |
| government transfer payments | payments to persons that are not made in return for currently supplied goods & services ie. SS benefits & veteran's benefits |
| imports | total domestic (US) spending on foreign goods |
| exports | total foreign spending on domestic (US) goods |
| Net Exports (Nx) | exports - imports |
| national income | total income earned by US citizens & businesses, no matter where they reside or are located |
| national income calculation | the sum of the payments to resources (land, labor, capital & entrepreneurship) = compensation to employees + proprietor's income + corp profits + rental income of persons + net interest |
| capital consumption allowance (depreciation) | the estimated amt of capital goods used up in production thru natural wear, obsolescence, & accidental destruction |
| net domestic product (NDP) | GDP - the capital consumption allowance |
| personal income | the amt of income that indiv actually receive; = the national income - undistributed corp profits, social ins taxes, & corp profits taxes, + transfer pmts |
| disposable income | the portion of personal income that can be used for consumption or saving; = to personal income - personal taxes (esp income tax) |
| Real GDP | the value of the entire output produced annually w/in a country's border's, adjusted for price changes; on x-axis along with output (unless on the cyclical unemp graph then it's on the y-axis) |
| economic growth | increases in Real GDP |
| 3 reasons for true economic growth | 1. more advanced technology, 2. better institutions, 3. new found resources |
| GDP per capita | a country's GDP / the population in the same country |
| GDP & Bads | GDP counts the goods & services, but it doesn't net out air & water pollution, thus some economists argue that our GDP is overstated |
| durable good | goods that are expected to last more than 3 yrs |
Created by:
katt61
Popular Economics sets