gdp Flashcards
gdp
sum of all final goods and services produced in an economy (in one year)
production and income
everything that is produced and sold constitutes income for someone
gdp formula
Y = C + I + G + NX (X - M)
consumption
spending by households on goods and services
(services, nondurable and durable goods)
invesment
spending by firms on factories, offices, machinery and additions to inventories + spending of households and firms on new houses
(business fixed investment, residential investments and changes in business inventories)
government purchases
spending by federal, state and local governments on goods and services
(government consumption and investment, excluding transfer payments)
net exports
exports - imports
comparable: domestic production
gdp per capita
standard of living
(without pollution, leisure, crime and other social problems)
nominal vs real gdp
nominal gdp: value at current year prices, inflated GDP
real GDP: value at base year price (2009), controls inflation
needed to compare with previous years
gdp deflector
measure of the price level
nominal gdp/ real gdp x100
gross national product
production performed by citizens of a nation, including overseas
national income
gdp - depreciation of fixed capital
(always less than gdp)
personal income
income received by households, includes transfer payments, but excludes firms’ retained earnings
disposable personal income
income - personal tax payments -> amount that households are able to spend or save
(always less than personal income)
gdp and national income
should be equal but statistical discrepancies makes it unlikely to happen
