Module 10 Flashcards
Keep track of the flows of money among different sectors of the economy
National Income, Personal Accounts/National Accounts
A person or group of people who share income
Household
An organization that produces goods and services for sales
Firm
Where goods and services are bought and sold
Product Markets
Resources, especially labor and capital, are bought and sold
Factor Markets
Household spending on goods and services
Consumer Spending
A share in the ownership of a company held by a shareholder
Stock
A loan in the form of an IOU that pays interest
Bond
Parents the the government makes to individuals without expecting a good or service in return
Government transfers
Equal to income plus government transfers minus taxes, the total amount of household income available to spend on consumption and save
Disposable Income
Equal to disposable income minus consumer spending, is disposable income that is not spent on consumption
Private Savings
Banking, stock, and bond markets, which channel private savings and foreign lending into investment spending, government borrowing, and foreign borrowing
Financial Markets
Total expenditures on goods and services by federal, state, and local governments
Government purchases of goods and services
Amount of funds borrowed by the government in the financial markets
Government Borrowing
Goods and services sold to other countries
Exports
Goods and services purchased from other countries
Imports
Stocks of goods and raw materials held to facilitate business operations
Inventories
Spending on raw, productive, physical capital, such as machinery and structures, or changes in inventories
Investment Spending
Goods and services sold to the final, or end, user
Final Goods and Services
Goods and services bought from one firm to be used as inputs into the production of final goods and services
Intermediate goods and services
The total value of all final goods and services produced in the economy during a given year
Gross Domestic Product (GDP)
For calculating GDP, survey firms and add up their contributions to the value of final goods and services
Value-added approach
To calculating GDP is to add up aggregate spending on domestically produced final goods and services in the economy - the sum of consumer spending, investment spending, government purchases of goods and services and exports minus imports
Expenditure Approach
The total spending on domestically produced final goods and services in the economy - is the sum of consumer spending, investment spending, government purchases of goods and services, and exports minus imports
Aggregate Spending
To calculating GDP is to add up the total factor income earned by households from firms in the economy, including rent, wages, interest, and profit
Income Approach
Of a producer, is the value of its sales minus the value of its purchases of inputs
Value added of a producer
The difference between the value of exports and the value of imports (X-IM)
Net exports
