Ch 5 - National-Income Accounting

Question 0

gross domestic product (GDP)

Answer 0

the total market value of all final goods and services produced within a nation’s borders in a given time period

Question 1

national-income accounting

Answer 1

the measurement of aggregate economic activity, particularly national income and its components

Question 2

GDP per capita

Answer 2

total GDP divided by total population; average GDP

Question 3

intermediate goods

Answer 3

goods or services purchased for use as input in the production of final goods or in services

Question 4

value added

Answer 4

the increase in the market value of a product that takes place at each stage of the production process

Question 5

nominal GDP

Answer 5

the value of final output produced in a given period, measured in the prices of that period (current prices)

Question 6

real GDP

Answer 6

the value of final output produced in a given period, adjusted for changing prices

Question 7

base year

Answer 7

the year used for comparative analysis; the basis for indexing price changes

Question 8

inflation

Answer 8

an increase in the average level of prices of goods and services

Question 9

production possibilities

Answer 9

the alternative combinations of final goods and services that could be produced in a given time period with all available resources and technology

Question 10

depreciation

Answer 10

the consumption of capital in the production process; the wearing out of plant and equipment

Question 11

net domestic product (NDP)

Answer 11

GDP less depreciation

Question 12

investment

Answer 12

expenditures on (production of) new plant, equipment, and structures (capital) in a given time period, plus changes in business inventories

Question 13

gross investment

Answer 13

total investment expenditure in a given time period

Question 14

net investment

Answer 14

gross investment less depreciation

Question 15

exports

Answer 15

goods and services sold to international buyers

Question 16

imports

Answer 16

goods and services purchased from international sources

Question 17

net exports

Answer 17

the value of exports minus the value of imports

Question 18

national income (NI)

Answer 18

total income earned by current factors of production; GDP less depreciation, plus net foreign factor income

Question 19

net foreign factor income

Answer 19

production employed in other nations creates an inflow of income for U.S. households

Question 20

personal income (PI)

Answer 20

income received by households before payment of personal taxes

Question 21

disposable income (DI)

Answer 21

after-tax income of households; personal income less personal tax

Question 22

saving

Answer 22

the part of disposable income not spent on current consumption; disposable income less consumption

Question 23

the stock of capital

Answer 23

the total collection of plant and equipment; won’t grow unless gross investment exceeds depreciation