GDP Flashcards
value
prices x quantity
market value
data they get from the market place produced (not sold)
country
in its boarders
what’s included in GDP
-anything produced in a country
-if something is built in the united states but the owner isn’t based in the united states it is included in GDP
what’s not included in GDP
-illegal transactions (drug dealing, black market dealing)
-stock and bond purchases
-transfer payments → payments made to us by the government
-used good sales → bc already counted when first bought
-if something is sold in the united states but its not produced in the united states its not included in GDP
gross national product (GNP)
if something is being sold in the united states but is not produced in the united states it is included in GNP
how is GDP calculated
Y=C+I+G+NX
Y
is the income; money received for selling something
C
is consumption (consumer spending) -> total spending by all households on goods or services; one exception not included in C section is housing
- durable goods → things we don’t buy all the time; are all the way down
- non-durable goods → things we buy all the time
I
is investment -> the total spending on goods and serves by firms or businesses; housing is included in I section
G
is government (federal) spending -> the total spending on goods and services by the government
NX
NX is Ex - Im
Ex
is exports → the total amounts of goods and services produced in US sold to world
Im
is imports → the total amount of goods and services produced in the world sold to US
nominal GDP
calculating GDP using current (or that year) prices
the real GDP
calculates GDP using a base year or constant prices; have to some how isolate prices (keep it stable)
percentage change in GDP
newest value - oldest value / oldest value x 100 = %change
economic reception
3 times in a row of negative GDP
economic expansion
positive GDP
GDP deflator
a measure or statistic of calculating inflation or deflation from price changes
GDP deflator for year x
(nominal GDP / real GDP) x 100
the percentage change in GDP deflator
(newest GDP deflator - oldest GDP deflator / oldest GDP deflator) x 100
-inflation or deflation is indicated with this
GDP per capita
GDP/population
-per person how much someone produces in this country
GDP production function
GDP = a(technology)f( L-labor, N-natural resources, K-capital, H-technological knowledge)
diminishing marginal return
examples that smaller country goes further than bigger countries for the same increase in a unit of productivity
nominal interest rate
is a value of interest of rate based on the current value of the market
real interest rate
nominal interest rate - inflation
r = n - π
