Chapter 19: GDP: Measuring Total Production and Income Flashcards
microeconomics
the study of how households and firms make choices, how they interact in markets, and how the government attempts to influence their choices
macroeconomics
the study of the economy as a whole, including topics such as inflation, unemployment, and economic growth
business cycle
alternating periods of economic expansion and economic recession
expansion
the period of a business cycle during which total production and total employment are increasing
recession
the period of a business cycle during which total production and total employment are decreasing
economic growth
the ability of an economy to produce increasing quantities of goods and services
inflation rate
the percentage increase in the price level from one year to the next
gross domestic product (GDP)
the market value of all final goods and services produced in a country during a period of time, typically one year
final good or service
a good or service purchased by a final user
intermediate good or service
a good or service that is an input into another good or service, such as a tire on a truck
transfer payments
payments by the government to households for which the government does not receive a new good or service in return
consumption
spending by households on goods and services, not including spending on new houses
investment
spending by firms on new factories, office buildings, machinery, and addition to inventories, plus spending by households and firms on new houses
government purchases
spending by federal, state, and local governments on goods and services
net exports
exports minus imports
