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Economics Test 2 - national income accounting the...

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1. national income accounting - the techniques used to measure the overall production of the economy and other related variables for the nation as a whole 2. gross domestic product (GDP) - the total market value of all final goods & services produced annually within the boundaries of the U.S., whether by U.S.- or foreign-supplied resources 3. intermediate goods - products that are purchased for resale or further processing or manufacturing 4. final goods - good that have been purchased for final use and not for resale or further processing or manufacturing 5. multiple counting - wrongly including the value of intermediate goods in the GDP; counting the same good or service more than once 6. value added - the value of the product sold by a firm less the value of the products purchased and used by the firm to produce the product 7. secondhand sales - 8. net investment - 9. net exports - exports minus imports 10. compensation of employees - wages and salaries plus wage and salary supplements paid by employers to workers 11. rents - 12. interest - the payment made for the use of money (of borrowed funds) 13. corporate profits - 14. national income - 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 15. nominal GDP - the GDP measured in terms of the price level at the time of measurement (unadjusted for inflation) 16. real GDP - GDP adjusted for inflation; GDP in a year divided by the GDP price index for that year, the index expressed as a decimal 17. price index - an index number that shows how the weighted-average price of a “market basket” of goods changes over time 18. underground economy - 19. real GDP per capita - inflation-adjusted output per person; real GDP/population 20. productivity - a measure of average output or real output per unit of input. For example, the productivity of labor is determined by dividing real output by hours of work 21. business cycles - recurring increases and decreases in the level of economic activity over periods of years; consists of peak, recession, trough, and expansion phases 22. peak - 23. recession - a period of declining real GDP, accompanied by lower real income and higher unemployment 24. trough - 25. expansion - a phase of the business cycle in which real GDP, income, and employment rise 26. labor force - persons 16 years of age and older who are not in institutions and who are employed or are unemployed and seeking work 27. unemployment rate - the percentage of the labor force unemployed at any time 28. unemployment rate - the percentage of the labor force unemployed at any time 29. discouraged workers - employees who have left the labor force because they have not been able to find employment 30.
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