Data of Macroeconomics Flashcards
GDP
1) Total expenditure on domestically produced final goods and services
2) Total income earned by domestically located factors of production
GDP Formula
Value of total output = consumption + investment + government spending + net exports
Consumption
1) Durable Goods
2) Nondurable Goods
3) Services
Investment
1) Business fixed investment
2) Residential fixed investment
3) Inventory investment
Stock
quantity measured at a point in time
Flow
Quantity measured per unit time
Government Spending
all government spending on goods and services excluding transfer payments
Net Exports
net spending abroad on our g&s
GNP
total income earned by the nation’s factors of production, regardless of where located
Nominal GDP
measures these values using current prices
Real GDP
measures these values using the prices of a base year
GDP deflator
100 * (nominal / real)
CPI
tracks COLA measures overall level of prices
CPI overstates inflation (3 reasons)
1) Substitution bias
2) Introduction of new goods
3) Unmeasured changes in quality
CPI vs GDP deflator capital goods
included GDP
excluded CPI
