Ch 5 - National-Income Accounting Flashcards
gross domestic product (GDP)
the total market value of all final goods and services produced within a nation’s borders in a given time period
national-income accounting
the measurement of aggregate economic activity, particularly national income and its components
GDP per capita
total GDP divided by total population; average GDP
intermediate goods
goods or services purchased for use as input in the production of final goods or in services
value added
the increase in the market value of a product that takes place at each stage of the production process
nominal GDP
the value of final output produced in a given period, measured in the prices of that period (current prices)
real GDP
the value of final output produced in a given period, adjusted for changing prices
base year
the year used for comparative analysis; the basis for indexing price changes
inflation
an increase in the average level of prices of goods and services
production possibilities
the alternative combinations of final goods and services that could be produced in a given time period with all available resources and technology
depreciation
the consumption of capital in the production process; the wearing out of plant and equipment
net domestic product (NDP)
GDP less depreciation
investment
expenditures on (production of) new plant, equipment, and structures (capital) in a given time period, plus changes in business inventories
gross investment
total investment expenditure in a given time period
net investment
gross investment less depreciation
exports
goods and services sold to international buyers
imports
goods and services purchased from international sources
net exports
the value of exports minus the value of imports
national income (NI)
total income earned by current factors of production; GDP less depreciation, plus net foreign factor income
net foreign factor income
production employed in other nations creates an inflow of income for U.S. households
personal income (PI)
income received by households before payment of personal taxes
disposable income (DI)
after-tax income of households; personal income less personal tax
saving
the part of disposable income not spent on current consumption; disposable income less consumption
the stock of capital
the total collection of plant and equipment; won’t grow unless gross investment exceeds depreciation
