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These vocab words correspond to chapter 17: Measuring national output and national income

GDP: (Gross Domestic Product)

The total market value of all final goods and services produced within a given period by factors of production located within a country.

Final goods and services

Goods and services produced for final use.

Intermediate Goods

Goods that are produced by one firm for use in further processing by another firm.

GDP and Unemployment

As GDP ↓ unemployment(at wage rate, people want work but can't find it) go ↑;

Not counted in GDP

Used goods, paper assets, intermediate goods, goods not used w/in a yr; output aboard by domestically owned factors or production, output produced by US citizens living in other countries, transfer payment, interest

NIPA (national income and product accounts)

Includes all data collected and published by government

Personal Income

The total income of households.
The income recieved by households after paying social insurance taxes but before paying personal income taxes.

Disposable personal income

Personal income- personal income taxes. The amount that households have to spend or save.

GNP (Gross national product)

The total market value of all final goods and services produced within a given period by factors of production owned by a country's citizens, regardless of where the output is produced.
US: GDP < GNP

Deprecation

The amount by which an asset's value falls in a given period.

Gross investment

The total value of all newly produced capital goods (plant, equipment, housing and inventory) produced in a given period

Net Investment

Gross investment-depreciation

Nominal GDP

Measured in current dollars; doesn't account for inflation factor.

Real GDP

Nominal GDP adjusted for price changes/inflation; calculated by selecting base yr weights

GDP defector

Measures changes in price level; nominal divided by real times 100

Expenditure Approach

Method of calculation GDP (measures total amount spent on all final goods/services during time period)

Expenditure Approach equation

C + I + G + (Exports - Imports)

Households personal consumption (C)

A major component of GDP. Expenditures by consumers of goods and services.

Durable Goods

Last relatively long time

Non-Durable Goods

Short duration (used up quickly)

Gross Private Domestic Investment (I)

Total investment in capital. The purchase of new housing, plants, equipment, and inventory by the private (non government) sector.

Non-residential investment

Expenditures by forms for tools, machines, factories and so on

Residential investment

Expenditures by households and firms on new houses and apartment buildings

Change in business inventories

Amount by which firms' inventories(goods that firms produce now but intend to sell later) change during a period of time.

Government consumption and gross investment (G)

Expenditures by federal, state and local government for final goods and services.

Does not include gov transfer payments of interest payments on national debt (not payment for final good/service)

Net Exports (Exports-Imports)

The difference between exports and imports. This can be negative or positive.

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