revision questions chapter 20 pt3 Flashcards
the circular flow diagram shows
the flows between different sectors of the economy.
In the income accounts, government expenditures on goods and services refer to those purchases made by
all levels of government
GDP - depreciation=
net domestic product
the largest component of national income is
compensation of employees
In the post World War II period, considerable growth in total production took place in the United Kingdom. But at the same time, businesses were able to produce by dumping their waste into streams and rivers with minimal cost, significantly polluting the bodies of water as a result. This occurrence is an example where
real GDP gives an overly positive view of economic welfare.
When exports from the United Kingdom exceed imports into the United Kingdom, the rest of the world
borrows from the United Kingdom.
gross domestic product is the total _________ produced within a country in a given time period
market value of all final goods and services
GPD formula
C + I + G + NX.
c= consumption expenditures
I = gross investment
g = government
nx = net exports of goods and services (x-m= exports-imports)
depreciation is
one of the flow variables affecting the capital stock
All of the following household expenditures are included in consumption expenditure EXCEPT
purchase of corporate stock. –> when an individual buys ownership shares in a company
the GDP deflator =
nominal GDP / real GDP x100
The circular flow diagram shows…
how money and goods move between households and businesses
Purchasing power parity prices are used to construct GDP data that
can be used to make more valid comparisons between one country and another.
what is depreciation
the decrease in the capital stock because of wear and tear.
In the computation of GDP, transfer payments made by the government are…
not included in GDP
