Chapter 9 Flashcards
Final Goods
Those sold to a final user
Intermediate Goods
Those not sold to a final user
Gross Domestic Product (GDP)
Current market value of all final goods and services
Transfer Payments
Taking from one person and giving to another, but not in return for any god or service
Bads
Unwanted phenomena such as disease, crime, and garbage
Expenditure Approach
Usual approach, with this approach, we add up the current market values of all final goods and services
Income Approach
Which adds up all the payments to factors of production, (wages, interest, rents, and profits), generated by production.
Consumption
Spending by consumers on non durable goods, durable goods, and services.
Investment
Spending by business on capital (plant, equipment, tools, etc.) changes in business inventories, and spending on new residential housing.
Government Purchases
Spending by all levels of government on goods and services.
Net Exports
Exports minus Imports
Real GDP
Which is what GDP would be if prices had remained the same as they were in a base year.
Economic Growth
Percentage change in Real GDP
Recession
Two successive quarters (three month periods)
