Definitions Economics Growth CH29

Question 1

Gross Domestic Product

Answer 1

measures the monetary value of goods and services produced by a country for a given period of time

Question 2

Nominal GDP

Answer 2

total monetary value of goods and services produced in an economy in a given period of time

Question 3

Consumption

Answer 3

The value of all private household consumption within a country

Question 4

Investment Expenditure

Answer 4

The sum of capital spending by all businesses within a country

Question 5

Net exports

Answer 5

The value of the difference between a countries import Expenditure and its export income

Question 6

Real GDP

Answer 6

The value of the national income (GDP) adjusted for inflation. This reflects the true value of goods and services produced

Question 7

GDP per head / Capita

Answer 7

The average value of annual GDP per person in a country

Question 8

The business cycle

Answer 8

Describes the fluctuations in the economic activity of a country over time, creating a long-term trend of economic growth in the economy

Question 9

GDP Equation

Answer 9

GDP = C+I+G+(X-M)
Consumption
Investment expenditure
Government spending
Net Exports

Question 10

Recession

Answer 10

Occurs in the business cycle when there is a fall in GDP for two consecutive quarters