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GDP, Growth & Instability Ch. 12
N/A
14
Economics
Undergraduate 2
12/12/2011

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Term
What is the market value of all final goods and services produced within the borders of a nation in a year?
Definition
GDP (Gross Domestic Product)
Term
What is purposely excluded in calculating GDP?
Definition
Intermediate goods and secondhand sales.
Term
GDP can be calculated by?
Definition
Adding consumer purchases of goods and services, gross investment spending by business, government purchases and net exports?
Term
What is the formula for GDP?
Definition
GDP = C + Ig + G + Xn
Term
What measures each year's output valued in terms of the prices prevailing in that year?
Definition
Nominal (current-dollar) GDP
Term
What measures each year's output in terms of the prices that prevailed in a selected base year?
Definition
Real (constant dollar) GDP
Term
Economic growth is?
Definition
Either, an increase in real GDP over time or an increase in real GDP per capita over time.
Term
The quantity and quality of a nations natural resources, the quantity and quality of its human resources, its stock of capital facilities, and its technology make up what?
Definition
The supply factors in economic growth.
Term
What is shown graphically as an outward shift of a nations production possibilities curve?
Definition
The growth of production capacity
Term
What is the primary reason GDP has grown?
Definition
Increases in the productivity of labor.
Term
What is the partial reason GDP has grown?
Definition
Increased inputs of labor.
Term
The productivity speed up is based on...?
Definition
Rapid technological change in form of the microchip and information technology, increasing returns and lower per unit costs and heightened global competition and holds down prices.
Term
The main sources of increasing returns in recent year are...?
Definition
The use of more specialized inputs as firms grown, the spreading of development costs, simultaneous consumption by consumers, and network effects and learning by doing.
Term
Growth is based on what?
Definition
The expansion and application of human knowledge, which is limited only by human imagination.
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