GDP Flashcards
Gross domestic product
GDP
The dollar value of all final goods and services produced within a country’s borders in a year.
GDP=C+I+G+(X-M)
National Income accounting
System that collects macroeconomic statistic on production income and savings
Intermediate goods
Goods used in the production of final goods
Non durable goods
Goods that lasts a short period of time such as food, light bulb and sneakers
Durable goods
Goods that lasts for a relatively long time such as fridge cars and DVD players
Nominal GDP
GDP measured in current prices
Real GDP
GDP expressed in constant or unchanging prices
Gross national product
GNP
The annual income earned by US owned firms and US citizen
Price level
The average of all prices in the economy
Aggregate supply
The total amount of goods and services in the economy available at all possible price levels
Aggregate demand
The amount of goods and serves in the economy that will purchased at all possible price levels
No market activities
GDP doesn’t measure goods and services that people make or do themselves
The underground economy
Black market
Negative externalities
Value of clean environment
Quality of life
Not include in GDP
Business circle
A period of macroeconomic expansion followed by a period of concentration
Expansion
A period of economic growth as a measured by a rise in real GDP
Peak
The height of an economic expansion when real GDP stops rising
Concentration
A period of economic decline marked by falling real GDP
Trough
The lowest point in an economic concentration when real GDP stops falling
Recession
A prolonged economic concentration
Depression
A recession that is long and severe
Stagflation
A decline in real GDP combined (with a rise in the price level)
Economic growth
A steady long term increase in real GDP
Real GDP per capita
Real GDP divided by the total population
Capital deepening
Process of increasing the amount of capital/workers
Savings
Income not used for consumption
Savings rate
The proportion of disposable income that is saved
Technological progress
An increase in efficiency gained by producing more output without using more inputs
