GDP Flashcards
Exports
Selling of goods to the rest of the world (outside the country)
Government Expenditure
Payment for goods and services purchased for governmental use
Imports
Purchase of goods and services from the rest of the world (outside the country)
Factors of Production
Economic Inputs: Labour, Land, Capital and Entrepreneurship
GDP
Market Value of the final goods and services produced within a country in a given time period
Net Exports
Value of exports (X) reduced by the value of imports (M). If positive, it’s an outflow from the country. If negative, inflow.
Final Good
An item bought by its final user
Investment (Firms)
Purchase of new PPE and inventories. Denoted by I in models
Consumption Expenditure
Total amount spent on goods and services
in an economy
Market Value (GDP)
The prices at which items are traded in markets. (in cents and dollars)
What does GDP measure
Total production. Also, total income and expenditure.
Depreciation
Decrease in the value (of a firm’s) capital that results from wear and tear over time
Gross Investment
Total amount spent both buying capital and replacing depreciated capital
Net Investment
Amount by which capital increases. (Gross investment - Depreciation)
Nominal GDP
GDP not adjusted for inflation
