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economics, principles of economics, fourth edition. Au: Gregory Mankiw ISBN-13: 978-0-324-55849-x


spending by households on goods and services, with the exception of purchases of new housing

GDP deflator

a measure of the price level calculated as the ratio of nominal GDP to real GDP times 100

government purchases

spending on goods and services by local, state, and federal governments

gross domestic product (GDP)

the market value of all goods and services produced within a country in a given period of time


spending on capital equipment, inventories, and structures, including household purchases of new housing


the study of economy-wide phenomena, including inflation, unemployment, and economic growth


the study of how households and firms make decisions and how they interact in markets

net exports

spending on domestically produced goods by foreigners (exports) minus spending on foreign goods by domestic residents (imports)

nominal GDP

the production of goods and services valued at current prices

real GDP

the production of goods and services values at constant prices

consumer price index (CPI)

a measure of the overall cost of the goods and services bought by a typical consumer


the automatic correction of a dollar amount for the effects of inflation by law or contract

inflation rate

the percentage change in the price index

nominal interest rate

the interest rate as usually reported without correction for the effects of inflation

producer price index

a measure of the cost of a basket of goods and services bought by firms

real interest rate

the interest rate corrected for the effects of inflation

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