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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

the dollar amount of all final goods and services produced within a country's borders in a year.

Per capita GDP

The dollar value of GDP divided by total population; average GDP

Intermediate goods

goods used in the production of final goods

value added

the market value a firm adds to a product at each stage in the production process

Nominal GDP

the GDP measured in terms of the price level at the time of measurement (unadjusted for inflation)

real GDP

gross domestic product (GDP) adjusted to account for changes in currency values and price changes

base period

year used as a point of comparison for other years in a series of statistics


an increase in the average level of prices of goods and services

Production Possibilities

The alternative combinations of final goods and services that could be produced in a given time period with all available resources and technology


decrease in value of an asset due to obsolescence or use

net domestic product

gross domestic product minus depreciation

gross investment

total investment by businesses on plant, equipment, and inventory goods before depreciation.

net investment

gross investment minus depreciation

net exports

value of exports minus the value of imports

National Income NI

total income earned by everyone in the economy

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 - personal taxes; income for expenditures and savings


part of disposable income not spent on consumption

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