Gross Measures - Economic Activity Flashcards
Identify important gross measures used in macroeconomics.
- Nominal gross domestic product (GDP)
- Real gross domestic product
- Potential gross domestic product
- Gross National Product (GNP)
- Net national product (NNP)
- National Income
- Personal Disposable Income
Define “nominal gross domestic product (nominal GDP)”
Total output of final goods and services produced for the exchange in the domestic market during a period (usually a year), without adjustment for changing price levels.
Define “real gross domestic product (real GDP)”
Total output of final goods and services produced for exchange in the domestic market during a period (usually a year), measured at constant prices.
Define “gross national product (GNP)”
Total output of all goods and services produced worldwide using economic resources of U.S. entities.
Define “net national product (NNP)”
Total output of all goods and services produced worldwide using economic resources of U.S. entities, but only including the cost of investment in new capital (excludes depreciation).
Define “national income (NI).”
The total payments for economic resources included in all production (but not including taxes as as payment).
Define “personal disposable income.”
Amount of income that individuals have available for spending, defined as total personal income after taxes are deducted.
Define “potential gross domestic product (potential GDP)”
The maximum final output that can occur in the domestic economy at a point in time, without creating upward pressure on the general level of prices in the economy.
What is natural rate of unemployment?
Natural rate of unemployment is achieved when there is no cyclical unemployment. The reasons for unemployment fall into one of four categories: (1) Frictional unemployment, (2) structural unemployment, (3) seasonal unemployment, and (4) cyclical unemployment. The natural rate of unemployment is measured as the sum of frictional, structural and seasonal unemployment.
