Macroeconomics: Measuring Domestic Output, National Income, and the Price Level (Chap 7)
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24 terms
Terms | Definitions |
|---|---|
 Gross Domestic Product | Total market value of all final goods and services produced annually within the foundaries of the US whether by US or foreign-supplied resrouces |
| Personal Consumption Expeditures (C) | expeditures of households for durable and nondurable consumer goods and services |
| Gross Private Domestic Investment (Ig) | expendituresw for newly produced capital goods and for additions to inventories |
| Net Private Domestic Investment | GPrivate domestic - consumption of fixed capital |
| Government Purchases (G) | espenditures of govenment for providing of good and capital that are long lasting |
| Net Exports (Xn) | exports minus imports |
| Consumption of Fixed Capital | An estimate of the amount of capital consumed in production of GDP; depreciation |
| Peronal Income (PI) | the earned and unearned income available to resource suppliers and others before the payment of personal taxes |
| Disposable Income (DI) | personal income - personal taxes; income for expenditures and savings |
| Nominal GDP | the GDP measured in terms of the price level at the time of measurement |
| Real GDP | GDP adjusted for inflation; GDP in a year divided by GDP price index for that year |
| National income accounting | Techniques used to measure the overall production of the economy and other related variables for the nation as a whole |
| intermediate goods | Products that are purchased fore resale or further processing or manufacturing |
| final goods | Goods and services that have been purchased for final use and not for resale or further processing or manufacturing |
| multiple counting | Wrongly including the value of "intermediate goods" in the "gross domestic product (GDP)"; counting the same good or service more than once |
| value added | The value of the product sold by a "firm" less the value of the products (materials) purchased and used by the firm to produce the product |
| expenditure approach | The method that adds all expenditures made for "final goods and services" to measure the "Gross domestic product (GDP)" |
| income approach | The method that adds all the income generated by the production of "final goods and services" to measure the "gross domestic product (GDP)" |
| national income | Total income earned by resource suppliers for their contributions to grow "gross domestic product (GDP)"; equal to teh gross domestic product minus "nonincome charges," minus "net foreign factor income" |
| indirect business taxes | Such taxes as "sales, excise, and busines property taxes", license fees, and "tariffs" that firms treat as costs of producing a product and pass on (in whole or in part) to buyers by charging higher prices. |
| net domestic product (NDP) | "Gross domestic product" less the part of teh eyar's output that is needed to replace teh "capital goods" worn out in producing the output; the nation's total output available for consumption or additoins to teh "capital stock" |
| price index | An index number that shows how the weighted-average price of a "market basket" of goods changes over time |
| consumer price index (CPI) | An index that measures the prices of a fixed "market basket" of some 300 goods and services bought by a "typical" customer |
| per capita output | Most meaningful measure of economic performances; found by dividing the "real GDP" by population |
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