Test 2 Flashcards
Business Cycle
The relatively short-term movement of the economy in and out of recession
Depreciation
the process by which capital ages over time and therefore loses it’s value
Depression
a lengthy and deep decline in output
Double counting
a potential mistake to be avoided in measuring GDP, in which output is counted more than once as it travels through the stages of production
Durable good
long-lasting good like a car or a refrigerator
Exchange rate
the price of one currency in terms of another currency
Final good & service
output used directly for consumption, investment, government, and trade purposes; contrast with intermediate good
GDP per capita
GDP divided by population
Gross domestic product (GDP)
the value of the output of all goods and services produced within a country in a year
Gross national product (GNP)
includes what is produced domestically & what is produced by domestic labor and business abroad in a year
Intermediate good
output provided to other businesses at an intermediate stage of production, not for final users; contrast with final good
Inventory
good that has been produced, not yet sold
National income
includes all income earned; wages, profits, rent, and profit income
Net national product (NNP)
GDP minus depreciation
Nominal value
the economic statistic actually announced at that time, not adjusted for inflation; contrast with real value
