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Complete list of Terms and Definitions for gdp

Terms Definitions
gnp gross national product.
Expansion TOTAL Production and TOTAL Employment are increasing.
Transfer payments Payments by the government to individuals for which the government does not receive a new good or service in return. NOT INCLUDED IN GDP; NO EXCHANGE FOR NEW GOODS OR SERVICES.
NNP Net National Product   GNP minus depreciation (run-down machinery, equipment, buildings).
Consumption? Spending by households on goods and services, not including spending on new houses.Divided into:SERVICES (health care)NON-DURABLE GOODS (food, clothes)DURABLE GOODS (cars, furniture)
Imports are... Spending on foreign-produced goods and services.
Gross Domestic Product Measures total production and income.
True or False: Aggregate income equals Aggregate Expenditure True
Household Production Goods and services people produce for themselves.
Nominal GDP is a more precise name for GDP
Economic Growth The ability of an economy to produce INCREASING QUANTITIES of GOODS and SERVICES.
Real GDP is value of goods and services produced in a given year when valued at the prices of a reference base year
Ways to calculate GDP Adding up total expenditures of the three groups firms sell goods and services to: domestic households, foreign firms and households, and the government.Calculating the total income received by households. Total production of goods and services of firms.
GDP Formula Y = C + I + G + NX
To make total income = GDP, we _______ indirect taxes less subsidies and _____ depreciation (add/subtract) add, add
The four divisions of income. Wages: firms pay wages to households in exchange for labor. Interest: for the use of capital. Rent: for natural resources such as land. Profit: the income that remains AFTER a firm has paid WAGES, INTERESTS, and RENT.
Intermediate Good or Service One used as an INPUT into another good or service.Ex: A tire to a truck
Average Price (Year 1) + Average Price (Year 2)Average Price (Year 2) + Average Price (Year 3)What kind of method of calculation is this? Calculating real GDP with 'CHAINED DOLLARS'.
GDP is the SIMULTANEOUS measurement of what two values? TOTAL Production and TOTAL Income   Value of goods sold = Total value of income   Ex: Money spent on a product will dissipate into someone's pockets.   "EVERY PENNY MUST END UP AS SOMEONE'S INCOME."
gdp gross domestic product.
Recession TOTAL Production and TOTAL Employment are decreasing.
Net Investment = Gross Investment - Depreciation
National Income "Net national product minus sales taxes"National Income (Total income)
Investment Spending by firms on new factories, office buildings, machinery, and additions to inventory. Spending by households on houses.
Double Counting Including intermediate good values in GDP, as opposed to including just final good values.
Exports are... Expenditures BY foreign firms and households ON domestically produced goods and services.
Business Cycle Alternating periods of expansion and recession.
Microeconomics Study of how households and firms make choices, interact in markets, and how to government attempts to influence their choices.
Government Purchases One of the four components of calculating GDP.   The spending by federal, state, and local governments on goods and services.
Macroeconomics Study of economy as a whole - inflation, unemployment, and economic growth.
democracy government by the people; a form of government in which the supreme power is vested in the people and exercised directly by them or by their elected agents under a free electoral system.
Nominal GDP The value of final goods and services evaluated at current-year prices.Calculated by summing the current values of final goods and services.
The two types of productions not included in the calculation of GDP Household Production Production   & Underground Economy Production
GDP is measured in... Values (in dollar terms) rather than quantities (in numerical terms).
The three divisions of investment? BUSINESS FIXED INVESTMENT - spending by firms on new factories, office buildings, and machinery used to produce goods. RESIDENTIAL INVESTMENT - spending by households and firms on houses.CHANGES IN BUSINESS INVENTORIES - goods that are produced but have not yet been sold.
What makes up the financial system? Banks and Stock & Bond markets.
Households supply ______ to firms in exchange for income. The factors of production: labor, capital, natural resources, and entrepreneurship.
Name the two ways Gross Domestic Product can be measured expenditure on goods and services or income earned by purchasing goods and services
What is an intermediate good, and is it included in GDP? An intermediate good is not included in GDP because it is a good that is used for part of the final product, for instance an engine Ford purchases to make their car, which is then sold to the customer. This avoids \"double counting\"