Measuring National Income, Output and Expenditure Flashcards
What does GDP stand for?
Gross domestic product
What is the definition of GDP?
The total level of economic output carried out in an economy in a given time period.
What are the three ways you can measure GDP?
Total incomes
Total output
Total expenditure
What does a expenditure side measurement estimate when calculating GDP?
It estimates how those resources are being used, so it can be seen what proportion of societies resources are being used for consumption and for what investment, ect.
What does the income side measurement estimate when calculation GDP?
It estimates on the way in which households earn their incomes. It tells you the factor incomes(the rewards for the factors of production) balance in an economy.
What does the output side measurement estimate when calculating GDP?
This looks at the economic structure of the economy . It will find the balance between primary production, secondary production and tertiary production.
What is the aggregate demand formula?
AD = C + I + G + (X - M)
What does the C stand for in the AD formula?
Consumer invement
What does the I stand for in the aggregate demand formula?
Investment
What does the G stand for in the aggregate demand formula?
Government spending
What does the X stand for in the aggregate demand formula?
Export of goods and services
What does the M stand for in the aggregate demand formula?
Imports of goods and services
What is capital investment?
Spending from businesses and the government into capital goods used in the factors of production.
What is government spending?
Spending on the state provided goods ad services, such as merit goods.
What are the exports of goods and services?
Goods and services that are sold to other countries that cause an external inflow of cash.
