Chapter 6 Vocabulary Flashcards
a short-run fluctuation in economic activity
business cycles
the purchase of final good and services by households with the exception of new housing
consumption
the period extending from the peak downward to the next trough (when economic activity is declining)
contraction
occurs from the bottom of a trough to the next peak (when economic activity is increasing)
expansion
measured as the percentage change in real per capita GDP
economic growth
goods that are sold to final users
final goods
goods that firms repack or bundle with other foods for sale at a later stage
intermediate goods
spending by all levels of government on final goods and services
* transfer payments do not count for this *
government spending
recession that lasted around two years that’s effects were felt around the world
great recession
the market value of all final goods and services produces within a nation during a specific period of time — typically a year
gdp
an alternative measure of national output, is the output produced by workers and resources owned by residents of the nation
gnp
growth in the overall level of prices in the economy
inflation
private spending on the tools, plant, and equipment used to produce future output
investment
total exports - total imports
net exports
GDP calculated from current prices
nominal gdp
GDP adjusted for changes in prices
- accounts for inflation -
real gdp
breaks down a countries economic output per person
per capita gdp
an index of the average prices of goods and services throughout an economy
price level (price index)
a short term economic downturn that typically lasts six to eighteen months
recession
outputs that provide benefits without producing a tangible product
service
- measuring living standards
- measuring economic growth
- measuring business cycles
uses of GDP
- informal production
- underground economy
- labor/leisure
- environmental quality
problems with GDP
formula for calculating nomGDP
GDP = C + I + G + NX
NX = ( exports - imports )
formula for calculating realGDP
realGDP = (nomGDP/price level) x 100
formula for calculating GDP deflator
(PI t - PI t-1 / PI t-1) x 100
formula for calculating growth rate
(GDPt - GDPt-1 / GDPt-1) x 100
