Ch. 7

Question 1

Macroeconomics

Answer 1

The study of economy on a broad scale, focusing on issues such as economic growth, unemployment, and inflation

Question 2

Gross Domestic Product (GDP)

Answer 2

The sum of the market values of all final goods and services produced within a country in a given period of time.

Question 3

Gross National Product (GNP)

Answer 3

Sum of market values of all final goods and services produced and capital owned by the permanent residents of a country in a given period of time.

Question 4

Consumption

Answer 4

Spending on goods and services by private individuals and households

Question 5

Investment

Answer 5

Spending on productive inputs, such as factories, machinery, and inventories.

Question 6

Inventory

Answer 6

The stock of goods that accompany produces now but doesn’t sell immediately

Question 7

Government purchases

Answer 7

Spending on goods and services by all levels of government

Question 8

Net exports

Answer 8

Value of goods and services produced domestically and consumed abroad minus the value of goods and services produced abroad and consumed domestically

Question 9

Real GDP

Answer 9

GDP calculation in which goods and services are valued at constant prices

Question 10

Nominal GDP

Answer 10

GDP calculation in which goods and Services are valued at current prices

Question 11

GDP delator

Answer 11

A measure of the overall change in prices in an economy, using the ratio between real And nominal GDP

Question 12

GDP per capita

Answer 12

A country’s GDP divided by its population

Question 13

Recession

Answer 13

A period of significant economic decline

Question 14

Depression

Answer 14

A particularly severe extended recession

Question 15

Green GDP

Answer 15

An alternative measure of GDP that subtracts the environmental costs of production from the positive outputs normally counted in GDP