AP ECON CH. 24
Terms in this set (22)
national income accounting
the techniques used to measure the overall production of the economy and other related variables for the nation as a whole.
gross domestic product (GDP)
the total market value of all final goods and services produced annually within the boundaries of the united states, whether by us or foreign-supplied resources.
products that are purchased for resale or further processing or manufacturing
goods that have been purchase for final use and not for resale or further processing or manufacturing.
wrongly including the value of intermediate goods in the gross domestic product; counting the same good or service more than once.
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.
the method that adds all expenditures made for final goods and services to measure the gross domestic product.
the method that adds all the income generated by the production of final goods and services to measure the gross domestic product.
personal consumption expenditures (C)
the expenditures of households for durable and nondurable consumer goods and services.
gross private domestic investment (Ig)
expenditures for newly produced capital goods (such as machinery, equipment, tools, and buildings) and for additions to inventories.
net private domestic investment
gross private domestic investment less consumption of fixed capital; the addition to the nation's stock of capital during a year.
government purchases (G)
expenditures by government for goods and services that government consumes in providing public goods and for public capital that has a long lifetime; the expenditures of all governments in the economy for those final goods and services.
next exports (NX)
exports minus imports
taxes on production and imports
a national income accounting category that includes such taxes as sales, excise, business property taxes, and tariffs which firms treat as costs of producing a product and pass on (in whole or in part) to buyers by charging a higher price.
total income earned by resource suppliers for their contributions to gdp plus taxes on production and imports; the sum of wages and salaries, rent, interest, profit, proprietors' income, and such taxes.
consumption of fixed capital
an estimate of the amount of capital worn out or used up (consumed) in producing the gross domestic product; also called depreciation.
net domestic product (NDP)
gdp less the part of the year's output that is needed to replace the capital goods worn out in producing the output; the nation's total output available for consumption of additions to the capital stock.
personal income (PI)
the earned and unearned income available to resource suppliers and others before the payment of personal taxes.
disposable income (DI)
personal income less personal taxes; income available for personal consumption expenditures and personal saving.
the GDP measured in terms of the price level at the time of measurement (unadjusted for inflation)
gdp adjusted for inflation; gdp in a year divided by the gdp price index for that year, the index expressed as a decimal.
an index number that shows how the weighted-average price of a "market basket" of goods changes over time.