Ch 23-24 Flashcards
The study of how households and firms make decisions and how they interact in markets
Microeconomics
The study of economy wide phenomenon including inflation unemployment and economic growth
Macroeconomics
The market value of all final gods and services produced within a country in a given period of time
Gross domestic product gpd
The spending by households on goods services with the exception of purchasing new housing
Consumption
Spending on capital, equipment, inventories and structures including household purchases of new housing
Investment
Spending on goods and services by local, state and federal governments
Government purchases
Spending on domestically produced goods by foreigners (exports) minus spending on foreign goods by domestic residents (imports)
Net exports
The production of goods and services valued at current prices
Nominal GDP
The production of goods and services valued at constant prices
Real GDP
a measure of the price level calculated as the ratio of nominal GDP to real GDP times 100
GPD deflator
a measure of the overall cost of the goods and services bought by a typical consumer
Consumer price index CPI
the percentage change in the price index from the preceding period
Inflation rate
a measure of the cost of a basket of goods and services bought by firms
Producer price index
the automatic correction by law or contract of a dollar amount for the effects of inflation
Indexation
The interest rate as usually reported without a correction for the effects of inflation
Nominal interest rate
