National Income Accounting
A term that describes a set of principles and standards used by countries to measure their production and income.
GDP
The gross domestic product is the value of all final goods and services produced in a country within a given time period.
GNP
Gross national product is the market value of all the products and services produced in a time period by the labour and capital supplied by the residents of a country.
NNP
Net national product is the market value of a production supplied by labour and capital supplied by the residents of a country, minus the depreciated value of capital goods.
Nominal GDP
The value, in current prices, of all final goods and services produced in a country within a given time period.
Real GDP
The value in constant prices, of all final goods and services produced in a country within a given time period, usually measured against prices of predetermined base year.
Per Capita GDP
An average based on the national income of the country divided by the country’s population.
PPP
Purchase power parity is the theory that in the long run, identical products and services that are sold in different countries should cost the same.
Aggregate Demand
The goal demand for a nation’s goods and services from domestic households, firms, the government and foreigners.
Wealth
The total value of the accumulated assets owned by an individual, house hod, community or country, minus all its liabilities.
Interest Rate
The opportunity cost of spending money.
Sticky Wage
Another name for the Keynesian, short-run aggregate supply curve. As firms find it difficult to cut worker’s wages in the short run, they must lay workers off to reduce cost. Thus output and employment fall when AD falls int he short run.
Unemployment
The condition of someone of working age (16-64) who is willing and able to work, actively seeking employment, but unable to find a job.
Unemployment Rate
The percentage of the total labour force in a nation that is unemployed.
Underemployment
The condition of a woke who is technically employed but is either overqualified for the job or is only working part time when full time work is desired.
Inflation
A sustained increase int eh average price level of goods and services in a nation.
Inflation Rate
The percentage change in a price index between one period of time and another. It measures the chafe in the APL of goods and services in a nation over time.
Demand-Pull Inflation
Too many consumers are chasing too few goods, so the APL of goods and services in a nation rises.
Cost-Push Inflation
The cost of production faced by a nation’s producers rise so the nation’s SRAS curve shifts to the left and APL increase as nation’s output rises.
Stagflation
The economy is experiencing either zero or negative economic growth.
Productivity
The amount of output attributable to each unit of input.
Efficiency
Getting the most out of a given input
Equality
Smaller disparities among a nation’s households in their maintainable living standards and in the distribution of income and wealth.
Equity
Fairness in economics.
