Flashcards
GDP, Income and Economic Growth
Cards in this deck (30)
- 1macroeconomicsstudy of the economy as a whole, including topics such as inflation, unemployment and economic growth.
- 2economic growththe ability of the economy to produce increasing quantities of goods and services.
- 3Business cyclealternating periods of economic expansion and economic contraction relative to trend growth.
- 4expansionperiod of a business cycle during which total production and total employment are increasing above trend growth.
- 5Recessionperiod of a business cycle during which total production and total employment are decreasing.
- 6inflation ratepercentage increase in general price level in the economy from 1 year to the next.
- 7Gross domestic product (GDP)the market value of all final goods and services produced in a country during a period of time.
- 8final good/servicenew good/service which is the end product of the production process that is purchased by the final buyer.
- 9intermediate good/servicegood/service that is an input into another good or service.
- 10value-addedthe market value a firm adds to a product
- 11net exportsvalue of exports minus value/expenditure of imports
- 12transfer paymentspayments by government to individuals for which government does not receive a good or service in return.
- 13consumptionspending by households on goods/services, not including spending on new houses.
- 14investmentspending by firms on new factories, office buildings, machinery and inventories, plus spending by households on new houses.
- 15government purchasesspending by federal, state and local governments on goods and services.
- 16black economybuying and selling of goods and services that is concealed from the government to avoid taxes and regulations or because the goods and services are illegal.
- 17nominal GDPthe market value of final goods/services evaluated at current year prices.
- 18real GDPa measure of the volume of final goods/services, holding prices constant.
- 19economic growth ratethe rate of change of real GDP from one year to the next.
- 20price levela measure of the average prices of goods/services in the economy.
- 21GDP deflatora measure of the price level, calculated by dividing nominal GDP by real GDP and multiplying it by 100.
- 22long-run economic growththe process by which rising productivity increased the average standard of living.
- 23labour productivitythe quantity of goods/services that can be produced by one worker or by one hour of work.
- 24capitalmanufactured goods that are used to produce other goods and services. e.g. computers, machines.
- 25human capitalthe accumulated knowledge and skills workers acquire from education and training or from life experiences.
- 26technological changean increase in the quantity of output firms can produce using a given quantity of inputs. generally new machinery, equipment, software.
- 27Potential GDPthe level of GDP attained when all firms are producing at capacity.
- 28economic growth modela model that explains changes in real GDP per capita in the long run.
- 29per-worker production functionthe relationship between real GDP, or output, per hour worked and capital per hour worked, holding the level of technology constant.
- 30microeconomicsstudy of how households and firms make choices, how they interact in markets and how the government attempts to influence their choices.
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- Economics Flashcards on GDP, Income and Economic Growth, created by jrath242 on 06/06/2013.
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