| Term | Definition |
|---|
| base year | The year chosen for the weights in a fixed-weight procedure. |
| change in business inventories | The amount by which firms' inventories change during a period. Inventories are the goods that firms produce now but intend to sell later. |
| compensation of employees | Includes wages, salaries, and various supplements - employer contributions to social insurance and pension funds, for example - paid to households by firms and by the government. |
| corporate profits | The income of corporate businesses. |
| current dollars | The current prices that one pays for goods and services. |
| depreciation | The amount by which an asset's value falls in a given period. |
| disposable personal income | Personal income minus personal income taxes. The amount that households have to spend or save. |
| durable goods | Goods that last a relatively long time, such as cars and household appliances. |
| expenditure approach | A method of computing GDP that measures the amount spent on all final goods during a given period. |
| final goods and services | Goods and services produced for final use. |
| fixed-weight procedure | A procedure that uses weights from a given base year. |
| government consumption and gross investment (G) | Expenditures by federal, state, and local governments for final goods and services. |
| 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. |
| gross investment | The total value of all newly produced capital goods (plant, equipment, housing, and inventory) produced in a given period. |
| gross national income (GNI) | GNP converted into dollars using an average of currency exchange rates over several years adjusted for rates of inflation. |
| gross national product (GNP) | The total market value of all final goods and services produced within a given period by factors of prodcution owned by a country's citizens, regardless of where the output is produced. |
| gross private domestic investment (I) | Total investment in capital - that is, the purchase of new housing, plants, equipment, and inventory by the private (or nongovernment) sector. |
| income approach | A method of computing GDP that measures the income - wages, rates, interest, and profits - received by all factors of production in producing final goods. |
| indirect taxes minus subsidies | Taxes such as sales taxes, customs duties, and license fees, less subsidies that the government pays for which it receives no goods or services in return. |
| intermediate goods | Goods that are produced by one firm for use in further processing by another firm. |
| national income | The total income earned by the factors of production owned by a country's citizens. |
| national income and product accounts | Data collected and published by the government describing the various components of national income and output in the economy. |
| net business transfer payments | Net transfer payments by business to others. |
| net exports (EX-IM) | The difference between exports (sales to foreigners of U.S.-produced goods and services) and imports (U.S. purchases of goods and services from abroad). This figure can be positive or negative. |
| net interest | The interest paid by business. |
| net investment | Gross investment minus depreciation. |
| net national product (NNP) | Gross national product minus depreciation; a nation's total product minus what is required to maintain the value of its capital stock. |
| nominal GDP | Gross domestic product measured in current dollars. |
| nondurable goods | Goods that are used up fairly quickly, such as good and clothing. |
| nonresidential investment | Expenditures by firms for machines, tools, plants, and so on. |
| personal consumption expenditures (C) | A major component of GDP; expenditures by consumers on goods and services. |
| personal income | The total income of households before paying personal income taxes. |
| personal savings | The amount of disposable income that is left after total personal spending in a given period. |
| personal savings rate | The percentage of disposable personal income that is saved. If the personal saving rate is low, households are spending a large amount relative to their incomes; if it is high, households are spending cautiously. |
| proprietors' income | The income of unincorporated businesses. |
| rental income | The income received by property owners in the form of rent. |
| residential investment | Expenditures by households and firms on new houses and apartment buildings. |
| services | The things we buy that do not involve the production of physical things, such as legal and medical services and education. |
| statistical discrepancy | Data measurement error. |
| surplus of government enterprises | Income of government enterpriss. |
| underground economy | The part of the economy in which transactions take place and in which income is generated that is unreported and therefore not counted in GDP. |
| value added | The difference between the value of goods as they leave a stage of production and the cost of the good as they entered that stage. |
| weight | The importance attached to an item within a group of items. |
| Expenditure approach to GDP= | C + I + G + (EX-IM) |
| GDP= | final sales - change in business inventories |
| net investment= | capital end of period - capital beginning of period |
| consumer price index (CPI) | A price index computed each month by the Bureau of Labor Statistics using a bundle that is meant to represent the "market basket" purchased monthly by the typical urban consumer. |
| cyclical unemployment | The increase in unemployment that occurs during recessions and depressions. |
| deflation | A decrease in the overall price level. |
| depression | A prolonged and deep recession. The precise definitions of prolonged and deep are debatable. |
| discouraged-worker effect | The decline in the measured unemployment rate that results when people who want to work but cannot find jobs grow discouraged and stop looking, thus dropping out of the ranks of the unemployed and labor force. |
| employed | An person 16 years old or older who 1) works for pay, either for someone else or in his own business for 1 or more hours per week, 2) works without pay for 15 or more hours per week in a family enterprise, or 3) has a job but has been temporarily absent, with or without pay. |
| frictional unemployment | The portion of unemployment that is due to the normal working of the labor market; used to denote short-run job/skill matching problems. |
| inflation | An increase in the overall price level. |
| labor force | The number of people employed plus the number of unemployed. |
| labor force participation rate | The ratio of the labor force to the total population 16 years old or older. |
| natural rate of unemployment | The unemployment that occurs as a normal part of the functioning of the economy. Sometimes taken as the sum of frictional and structural unemployment. |
| not in the labor force | A person who is not looking for work, because he or she either does not want a job or has given up looking. |
| output growth | The growth rate of the output of the entire economy. |
| per-capita output growth | The growth rate of output per person in the economy. |
| producer price indexes (PPIs) | Measures of prices that producers receive for products at all stages in the production process. |
| productivity growth | The growth rate of output per worker. |
| real interest rate | The difference between the interest rate on a loan and the inflation rate. |
| recession | When real GDP declines for two consecutive quarters. Marked by falling output and rising unemployment. |
| structural unemployment | The portion of unemployment that is due to changes in the structure of the economy that result in a significant loss of jobs in certainindustries. |
| sustained inflation | Occurs when the overall price level continues to rise over some fairly long period of time. |
| unemployed | A person 16 years old or older who is not working, is available for work, and has made specific efforts to find work during the previous 4 weeks. |
| unemployment rate | The ratio of the number of people unemployed to the toal number of people in the labor force. |
| labor force = | employed + unemployed |
| population = | labor force + not in labor force |
| unemployment rate = | unemployed/(employed + unemployed) |
| labor force participation rate = | labor force / population |
Combine with other sets
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