Key Macroeconomic Definitions

Question 1

National product

Answer 1

Value of total final output of the country over a period of time

Question 2

National expenditure

Answer 2

Total spending on a country’s total output over a period of time

Question 3

National income

Answer 3

Total income earned by nation from producing the country’s total final output over a period of time

Question 4

GDP

Answer 4

Value of all final g&s produced by f.o.p found within a country’s geographical boundaries, during a given period of time

Question 5

GNI

Answer 5

Value of all final g&s produced by f.o.p owned by residents of a country, during a given period of time
(GNI = GDP + factor Y from abroad - factor Y paid abroad)

Question 6

Factor Y paid abroad

Answer 6

Factor income earned by FOREIGNERS in the country from their local production operations

Question 7

Factor Y from abroad

Answer 7

Factor income earned by RESIDENTS who are overseas for the final output they produce overseas

Question 8

FIXED investment

Answer 8

Plant, equipment, factories, buildings, machinery

Question 9

INVENTORIES

Answer 9

Raw materials, semi-finished goods, products waiting to be sold

Question 10

Residential investment

Answer 10

Invest in housing; non-productive

Question 11

Real value of an asset

Answer 11

Unit of g&s the asset can exchange for