Macroeconomic Work Sheet 1 Flashcards Preview

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Flashcards in Macroeconomic Work Sheet 1 Deck (4)
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1
Q

GDP

A

The value of aggregate output produced within an economy in a 12 month period.

2
Q

Nominal GDP

A

The sum of the quantities of final goods produced in an economy times their current price. ( GDP measures at current prices).

3
Q

Real GDP

A

A measure of aggregate output. The sum of quantities produced in an economy times their price in a base year. Also known as GDP adjusted for inflation.

GDP after allowing for inflation: i.e. GDP measured in constant prices: i.e. in terms of the prices ruling in some base year.

4
Q

What does the GDP deflator measure?

A

The ratio of nominal GDP to real GDP; a measure of the overall price level. Gives the average price of the final goods produced in an economy.