Chapter 23 Flashcards
(19 cards)
inflation
rate at which average prices are rising
GDP measures
measures the total income of a nation by measuring
- total income of everyone
- total expenditure on the economy’s output of goods and services
expenditure
spending funds
all expenditures are..
all expenditure in the economy ends up as someone’s income
intermediate good
product will be used for something else (paper turned into card)
final good
product for the end consumer
tangible goods
can be touched (food, clothing)
intangible services
can’t be touched (haircuts)
gdp measures produced items in which time
present, does not count items produced in past
gdp “within a country”
products have to be produced domestically
GNP
gross national product: total income earned by a nations permanent residents
consumption
spending by households on goods and services
investment
purchase of goods that will be used in the future to produce more goods and services
- purchase of a new house
government purchases
spending on goods and services by local and national governments (does not include transfer payments)
net exports
net exports = exports - imports
real GDP
shows how production changes over time -> constant prices (fixed)
nominal GDP
current prices
GDP deflator
measures the current level of prices relative to the level of prices in the base year
- shows whats happening to prices, not quantities
GDP does not measure
leisure, value of goods and services produced at home, quality of environment, distribution of income
