Macroecon Test 1 Review Part 2 - Chapter 6 Gross Domestic...

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Chapter 6Gross Domestic Product (GDP): The market value of all final goods and services produced within a country during a specific period, typically a year.Three primary uses of GDP:oMeasuring Living Standards.oMeasure Economic GrowthoDetermine whether an economy is experiencing recession or expansion.Per Capita GDP: GDP per person. Used for gauging living standards, divide country’s total GDP by its population. Inflation:The growth in the overall level of prices in an economy. Real GDP:GDP adjusted for changes in prices. Economic Growth:Measured as the percentage change in real per capita GDP.Recession:A short-term economic downturn, typically last about 6 to 18 months.Great Recession: The U.S. recession lasting from December 2007 to June 2009.Business Cycle:A short-run fluctuation in economic activity.Economic Expansion:A phase of the business cycle during which the economy is growing faster than usual.Economic Contraction:A phase of the business cycle during which the economy is growing more slowly than usual. Average Long-run growth of Real GDP for the U.S. is about 3% per year. Service: An output that provides benefits without the production of a tangible product. Intermediate Good:A good that firms repackage or bundle with other goods for sale at a later stage. Final Good:A good sold to final users.Gross National Product (GNP):The output produced by workers and resources owned by residents of the nation. EX: NIKE. Owners of Nike live in America, but products are

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