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Vocabulary chapter 21
Econ 1020
44
Economics
Undergraduate 1
10/26/2014

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Term
National Income and Product Accounts
Definition
Data collected and published by the government describing the various components of national income and output in the economy.
Term
Gross Domestic Product (GDP)
Definition

The total market value of all final goods and services produced within a given period by factors of production located within a country.

 

 

Term
Final goods and services
Definition
Goods and services produced for final use.
Term
Intermediate goods
Definition
Goods that are produced by one firm for use in further processing by another firm.
Term
Value added
Definition
The difference between value of goods as they leave a stage of production and the cost of the goods as they enter that stage.
Term
Gross National Product (GNP)
Definition
The total market value of all final goods ans services produced within a given period by factors of production owned by a country's citizens, reguardless of where the output in produced.
Term
Expenditure approach
Definition
A method of computing GDP that measures the total amount spent on all final goods and services during a given period.
Term
Income approach
Definition
A method of computing GDP that measures income (wages, rents, interest, and profits) recieved by all factors of production in producing final goods and services.
Term
Personal comsumption expenditures (C)
Definition
Expenditures by consumers on goods and services.
Term
Durable goods
Definition
Goods that last a relatively long time, such as cars and household appliances.
Term
Nondurable goods
Definition
Goods that are used up fairly quickly, such as food and clothing.
Term
Services
Definition
The things we buy that do not involve the production of physical thingsm such as legal and medical services and education.
Term
Gross Private Domestic Investment (I)
Definition
Total investment in capital. That is, the purchase of new housing, plants, equipment, and inventory by the private or nongovernmental sector.
Term
Nonresidental investment
Definition
Expenditures by firms for machines, tools, plants, and so on.
Term
Residental Investment
Definition
Expenditures by households and firms on new houses and apartment buildings.
Term
Change in Business Inventories
Definition
The amount by which firms' ubventories change during a period. Inventories are the goods that firms produce now but intend to use later.
Term
Depreciation
Definition
The amount by which an asset's value falls in a given period.
Term
Gross Investment
Definition
The total value of all newly produced capital goods (plant, equipment, housing, and inventory) produced in a given period.
Term
Net investment
Definition
Gross investment minus depreciation.
Term
Government consumption and gross investment (G)
Definition
Expenditures by federal, state, and local governments for final goods and services.
Term
Net exports (EX-IM)
Definition
The difference between exports and imports. The figure can be positive or negative
Term
National income
Definition
The total income earned by the factors of production owned by a countries citizens.
Term
Compensation of employees
Definition
Includes wages, salaries, and various supplements--employer contributions to social insurance and pension funds, for example--paid to households by firms and by the government.
Term
Proprietors' income
Definition
The income of unincorporated businesses.
Term
Rental income
Definition
The income recieved by property owners in the form of rent.
Term
Corporate profits
Definition
The income of corporations.
Term
Net interest
Definition
The interest paid by businesses.
Term
Indirect taxes minus subsidies
Definition
Taxes such as sales taxes, customs duties, and license fees less subsities that the government pays for which it recieves no goods or services in return.
Term
Net business transfer payments
Definition
Net transfer payments by businesses to others.
Term
Surplus of government enterprises
Definition
Income of government enterprises.
Term
Net National Product (NNP)
Definition
Gross national product minus depriciation; a nation's total product minus what is required to maintain the value of its capital stock.
Term
Statistical discrepancy
Definition
Data measurement error.
Term
Personal income
Definition
The total income of households.
Term
Disposable personal income or after-tax income
Definition
Personal income minus personal income taxes. The amount that households have to spend or save.
Term
Personal saving
Definition
The amount of disposable income that is left after total personal spending in a given period.
Term
Personal saving rate
Definition

The percentage of disposable personal income that is saved.

1.If the personal saving rate is low, households are spending a large amount relative to their incomes                

2.  If it is high, households are spending cautiously 

Term
Current dollars
Definition
The current prices that we pay for goods and services.
Term
Nominal GDP
Definition
Gross domestic product measured in current dollars.
Term
Weight
Definition
The importance attached to an item within a group of items.
Term
Base year
Definition
The year chosen for the weights in a fixed-weight procedure.
Term
Fixed-weight procedure
Definition
A procedure that uses weights from a given base year.
Term
GDP Deflator
Definition
Is a measure of the overall price level.
Term
Informal economy
Definition
The part of the economy in which transactions take place and in which income is generated that is unreported and therefore not counted in GDP.
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