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Chapter 2
Chapter 2 Macro Economic Terms
13
Economics
Undergraduate 1
09/26/2009

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Term
Gross Domestic Product (GDP
Definition

The total market value of all final goods and services produced within a nation's borders in a given time period

Term
Per Capita GDP
Definition

 

The dollar value of GDP divided by total population; average GDP

 

Term
Economic Growth
Definition

An increase in output (real GDP); an expansion of production possibilities

Term
Investment
Definition

Expenditures on (production of) new plant, equipment, and structures (capital) in a given time period, plus changes in business inventories

Term
Income Transfers
Definition

Payments to individuals for which no current goods or services are exchanged, Social Security, welfare, unemployment benefits

Term
Exports
Definition

Goods and services sold to foreign buyers

Term
Imports
Definition

Goods and services purchased from foreign sources

Term
Net Exports
Definition

The value of exports minus the value of imports  

Term
Comparative Advantage
Definition

The ability of a country to produce a specific good at a lower opportunity cost

than its trading partners

Term
Human Capital
Definition

The knowledge and skills possessed by the workforce

Term
Capital-Intensive
Definition

Production processes that use a high ratio of capital to labor inputs

Term
Productivity
Definition

Output per unit of input, such as output per labor-hour

Term
Externalities
Definition

Costs (or benefits) of a market activity borne by a third party

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