Chapter 24 Flashcards
(19 cards)
GROSS DOMESTIC PRODUCT
total market value of all final goods and services produced annually within the boundaries of the United States, whether by US or foreign supplied resources
measured in dollars
FINAL GOODS
goods that have been purchased for final use and not for resale or further processing or manufacturing
INTERMEDIATE GOODS
products that are purchased for resale or further processing or manufacturing
MULTIPLE COUNTING
wrongly including the value of intermediate goods in the gross domestic product; counting the same good or service more than once
VALUE ADDED
value of a product sold by a firm less the value of the products purchased and used by the firm to produce that product
Non-productive transactions
transfer payment
stock and bond transactions
no second hand sales
EXPENDITURES APPROACH
method that adds all expenditures made for a final goods and services to measure the gross domestic product
PERSONAL CONSUMPTION EXPENDITURES- (C)
the expenditures of households for durable and non durable consumer goods and services
GROSS PRIVATE DOMESTIC INVESTMENT (Lg)
expenditures for newly produced capital goods and for additions to inventories
GOVERNMENT PURCHASES (G)
expenditures by government for gods and services that government consumes in providing public goods and for public capital that has a long lifetime
NET EXPORTS (Xn)
exports minus imports
GDP=
C+Lg+G+Xn
INCOME APPROACH
method that adds all the income generated by the production of final goods and services to measure the gross domestic product
NET DOMESTIC PRODUCT
GDP less the part of the year’s output that is needed to replace the capital goods worn out in producing the output
NATIONAL INCOME
total income earned by resource suppliers for their contributions to gross domestic product plus taxes on production and imports
PERSONAL INCOME
the earned and unearned income available to resource suppliers and others before the payment of personal taxes
DISPOSABLE INCOME
personal income less personal taxes; income available for personal consumption expenditures and personal saving
PRICE INDEX
an index number that shows how the weighted average price of a market basket of goods changes over time
REAL GDP
GDP adjusted for inflation
