4.1 National income statistics Flashcards
Define the term “National Income”
A country’s total output
Define the term “National Income Statistics”
Measures the total output of an economy
Define the term “Gross Domestic Product (GDP)”
The total output produced by a country
Define the term “Net property income from abroad”
Receipts of profit, rent, and interest earned on the ownership of foreign assets minus the payments of the profit, rent, and interest to non-residents.
Define the term “Compensation of employees”
Income of workers who work in another country for a short period of time.
Define the term “Gross national disposable income”
GNI plus net transfers of workers income to their relatives, to and from other countries.
Define the term “Multinational companies”
Firms that operate in more than one country.
Define the term “Output method”
A way of measuring GDP by calculating the total production of goods and services of the country
Define the term “Value added”
The difference between the cost of bought in materials and the market price that the finished good/service is sold for.
Define the term “Circular flow of income”
A simplified view of how income flows in the economy.
Define the term “Income method”
A way of measuring GDP by totaling all the incomes earned in producing the country’s ouput.
Define the term “Expenditure method”
A way of calculating GDP by totaling all the spending on a country’s output.
Define the term “Market prices”
Prices paid by the consumers; they take into account indirect taxes and subsidies.
Define the term “Basic prices”
Prices charged by producers before the addition of indirect taxes and the deduction of subsidies.
Define the term “Gross investment”
Total spending on capital goods.
