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Macroeconomics Chapter 1

Terms in this set (26)

Income per Capita
Income per person. Calculated by dividing a nation's aggregate income by the number of people in the country
Recessions
Periods in which GDP falls for at least two quarters
Unemployment
When a person does not have a job and has actively looked for work in the prior four weeks and is currently available for work
Unemployment Rate
The fraction of the labor force that is unemployed
National Income Accounts
Measure the level of aggregate economic activity in a country
National Income and Product Accounts (NIPA)
The system of national income accounts that is used by the U.S. government
Gross Domestic Product (GDP)
The market value of the final goods and services produced within the borders of a country during a particular period of time
Identity
Link two variables when they are defined in a way that makes them mathematically identical
Factors of Production
The inputs to the production process
Four Economic Flows that Connect Households and Firms
1. Production
2. Expenditure
3. Income
4. Factors of Production
Value-Added
The firm's sales revenue minus the firm's purchases of intermediate products from other firms
Consumption
The market value of consumption goods and consumption services that are bought by domestic households
Investment
The market value of new physical capital that is brought by domestic households and domestic firms
Government Expenditure
The market value of government purchases of goods and services
Exports
The market value of all domestically produced goods and services that are purchased by households, firms, and governments in foreign countries
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