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EXTRA CHP 7
Question | Answer |
---|---|
National income accounting helps | Assess the economy's health by monitoring production and employment levels, Track the economy's long-run growth trajectory, adjust economic policies to safeguard and improve the economy's health |
Primary measure of an economy's performance is its | aggregate output/total output(several types like GDP) |
GDP only counts the value of | final goods/services produced domestically(not intermediate goods/services) |
To add the value of different items, you sum up | their total monetary value(to find market value) |
GDP excludes nonproduction transactions since they are | purely financial transactions and secondhand sales |
Financial Transactions EX: | Public transfer payments/Private transfer payments/Stock market transactions |
Economist consider the US economy as a | service economy |
GPDI are | economic investments(tools and recipes) |
Private | Businesses, not gov |
Gross | all investment goods(including ones replacing worn out goods) |
Net | resultant amount of two or more variables |
Nominal GDP to Real GDP method 1 | Find nGDP Compute a GDP price index Divide each year's nGDP by that years price index |
Nominal GDP to Real GDP method 2 | Break down nGDP into quantities/price s each year Find real GDP each year by figuring out prices for base year from data collecte |
Real-word GDP is | more complicated to calculate |
GDP shortcomings as a measure of total output/well-being: | Nonmarket Activities/Leisure and Psychic income(less work hours)/Improved Product Quality/The Underground Economy/GDP effect on environment/Composition and Distribution Output/Noneconomic sources of well-being |