MACROECONOMICS – Chapter 6: Measuring National Output & Income – Flashcards
Unlock all answers in this set
Unlock answersquestion
gross national product (GNP)
answer
the total market value of all final goods and services produced within a given period by factors of production owned by a country's citizens, regardless of where the output is produced
question
gross domestic product (GDP)
answer
the total market value of all final goods and services produced within a given period by factors of production located within a country (new good or service must be produced to count)
question
National Income & Product Accounts (NIPA)
answer
data has been collected and published by the Bureau of Economic Analysis (BEA), of the Department of Commerce ever since; it tracks in detail the various components of national income and output of the U.S. economy
question
the expenditure approach
answer
a method of computing GDP that measures the total amount spent on all final goods during a given period; GDP = C + I + G +(EX-IM)
question
the income approach
answer
a method of computing GDP that measures income--wages, rents, interest, and profits--received by all factors of production in producing final goods; GDP = national income + depreciation + (indirect taxes - subsidies) + net factor payments to the rest of the world + other
question
personal consumption expenditures (C)
answer
household spending on consumer goods
question
gross private domestic investment (I)
answer
spending by firms and households on new capital: plant, equipment, inventory, and new residential structures
question
government consumption and gross investment (G)
answer
counts expenditures by federal, state, and local governments for final goods and services
question
net exports (EX - IM)
answer
net spending by the rest of the world on goods produced in the U.S.
question
durable goods
answer
goods that last a relatively long time, such as cars and appliances
question
nondurable goods
answer
goods that are used up fairly quickly, such as food and clothing
question
services
answer
things that do not involve the production of physical things, such as legal services, medical services, and education
question
investment
answer
refers to the purchase of new capital (equipment or facility)
question
gross private domestic investment
answer
total investment by the private sector; includes the purchase of new housing, plants, equipment, and inventory by the private sector
question
nonresidential investment
answer
includes expenditures by firms for machines, tools, plants, and so on
question
residential investment
answer
includes expenditures by households and firms on new houses and apartment buildings
question
change in inventories
answer
computes the amount by which firms' inventories change during a given period; inventories are the goods that firms produce now but intend to sell later
question
exports (EX)
answer
sales to foreigners of U.S.-produced goods and services
question
imports (IM)
answer
U.S. purchases of goods and services from abroad
question
national income
answer
the total income earned by the factors of production owned by a country's citizens
question
personal savings rate
answer
the percentage of disposable personal income that is saved
question
nominal GDP
answer
GDP measured in current dollars; includes all of the components of GDP valued at their current prices
question
current dollars
answer
the current prices we pay for things
question
weight
answer
the importance attached to an item within a group of items
question
base year
answer
the year chosen for the weights in a fixed-weight procedure
question
fixed-weight procedure
answer
uses weights from a given base year
question
chain-weighted procedure
answer
uses a geometric average of base years which change over time as the weight
question
underground economy
answer
the part of an economy in which transactions take place and in which income is generated that is unreported and therefore not counted in GDP
question
gross national income (GNI)
answer
a measure used to make international comparisons of output; it is GNP converted into dollars using an average currency exchange rates over several years adjusted for rates of inflation
