Chapter 8.2 Flashcards
National income accounting
The measuring of an economy’s national income or the value of output
National output
The output of an economy
National income
The total income of an economy
What are the three ways to measure the value of national output?
Expenditure approach
Income approach
Output approach
Expenditure approach
Adds up all spending to buy final goods and services produced within a country over a time period
Income approach
Adds up all income earned by the factors of production that produce all goods and services within a country over a time period
Output approach
Calculates the value of all final goods and services produced in a country over a time period
Consumption
All purchases by households on final goods and services in a year
Investment
Spending by firms on capital goods or spending on new construction
Net exports
The value of all exports minus the value of all imports
Gross domestic product (GDP)
The market value of all final goods and services produced in a country over a time period
What is GDP made up of?
C + I + G + (X - M)
Gross national income (GNI)
The total income received by the residents of a country, equal to the value of all final goods and services produced by the factors of production supplies by the country’s residents regardless of where the factors are located
Nominal value
Money value, or value measured in terms of prices at the time of measurement
Real value
A measure of value that takes into account changes in prices over time
