Exam #2 Vocab Flashcards
intermediate goods
Goods or services purchased for use as input in the production of final goods or in services.
investment
Expenditures on (production of) new plant, equipment, and structures (capital) in a given time period, plus changes in business inventories.
national income (NI)
Total income earned by current factors of production: GDP less deprection and indirect business taxes, plus net foreign factor income.
national-income accounting
The measurement of aggregate economic activity, particularly national income and its components.
net domestic product
GDP less depreciation.
net exports
The value of exports minus the value of imports.
net investment
Gross investment less depreciation.
personal income (PI)
Income received by households before payment of personal taxes.
saving
The part of disposable income not spent on current consumption; disposable income less consumption.
value added
The increase in the market value of a product that takes place at each stage of the production process.
production possibilities
The alternative combinations of final goods and services that could be produced in a given time period with all available resources and technology.
base period
The time period used for comparative analysis; the basis for indexing, for example, of price changes.
inflation
An increase in the average level of prices of goods and services.
real GDP
The value of final output produced in a given period, adjusted for changing prices.
nominal GDP
The value of a final output produced in a given period, measured in the priced of that period (current prices).
