GDP Flashcards
What is microeconomics?
The study of how households and firms make choices, how they interact in markets and how the governement attempts to influence their choices.
What is macroeconomics?
The study of the economy as a whole including topics such as inflation, unemployment and economic growth.
What is economic growth?
The expansion of societies productive portential, usually measured by the rate of growth in real GDP.
What is Unemployement rate?
The percentage of the labour force that is unemployed.
What is Business cycle?
Alternating periods of economic expansion and economic contraction relative to the trend rate of economic growth.
What is expansion?
THe period of a business cycle during which total production and total employement are increasing above trend growth.
What is contraction?
The period of a business cycle during which total production and total employement are falling below trend growth.
What is recession?
Recession is the period of a business cycle during which total production and total employment are decreasing.
What is Inflation rate?
The percentage increase in the general price level in the economy from one year to the next.
What is GDP?
Gross Domestic Product is the market value of all final goods and services produced in a country during a period of time.
Final Good or service.
A new good or service which is the end product of the production process that is purchased by the final user.
What is an Intermediate Good or Service?
A good or service that is an input into another good or service.
What is value added?
The market value a firm adds to a product.
What is Net Domestic Product?
NDP is calculated by measuring GDP and subtracting the value of depreciation on capital equipment.
What is Gross National Income?
GNI is Australia’s GDP plus income generated overseas by Australian residents and firms, minus the income generated in Australia by non-residents and foreign firms.
What are Net exports?
Net exports are the expenditure on exports minus the expenditure on imports.
What are Transfer Payments?
Transfer payments are payments by the governement to individuals for which the governement does not receive a good or service in return.
What is consumption?
Spending by housholds on goods and services, not including spending on new houses.
What is investment?
Spendin by firms on new factories, office buildings, machienery, and inventories, plus spending by households on new houses.
What are Government Purchases?
Spending by federal, state and local governements on goods and services.
What is the underground economy?
Buying and selling of goods and services that is concealed from the governement to avoid taxes or regulations or become the goods and services are illegal.
