ECON 3.1-3.2: Economic Activity

Question 1

Define gross domestic product.

Answer 1

GDP - the total money value of all final goods and services produced in an economy in a given time period

Question 2

Define gross national income.

Answer 2

GNI - the total money value of all final goods and services produced in an economy in one year, plus net property income from abroad (interest, rent, dividends, and profit).

Question 3

Define consumption (C).

Answer 3

Spending by households on consumer goods and services over a period of time.

Question 4

Define investment (I).

Answer 4

The addition of capital stock to the economy or expenditure by firms on capital.

Question 5

Define government spending (G).

Answer 5

Spending by governments on goods and services.

Question 6

Define net exports (X-M).

Answer 6

Export revenues minus import expenditure.

Question 7

Define real GDP.

Answer 7

Total money value of all final goods and services produced in an economy in a given time period, usually one year, adjusted for inflation.

Question 8

Define real GDP per capita.

Answer 8

Real GDP divided by the population of the country.