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Chapter 23
Measuring a Nation's Income
21
Economics
Not Applicable
04/05/2017

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Term
The total expenditure
Definition
...must equal the total income in the economy.
Term
gross domestic product (GDP)
Definition
measures an economy’s total expenditure on newly produced goods and services and the total income earned from the production of these goods and services.
Term
GDP
Definition
The market value of all final goods and services produced within a country in a given period of time.
Term
consumption, investment, government purchases, net exports
Definition
Name the 4 components of expenditure GDP is divided among
Term
consumption
Definition
includes spending on goods and services by households, with the exception of purchases of new housing
Term
investment
Definition
includes spending on new equipment
and structures, including households’ purchases of new housing
Term
government purchases
Definition
include spending on goods and services by local, state, and federal governments
Term
net exports
Definition
equal the value of goods and services produced domestically and sold abroad (exports) minus the value of goods and services produced abroad and sold domestically (imports)
Term
nominal GDP
Definition
uses current prices to value the economy’s production of goods and services
Term
real GDP
Definition
uses constant base-year prices to value the economy’s production of goods and services
Term
GDP deflator
Definition
(calculated from the ratio of nominal to real GDP times 100) measures the level of prices in the economy.
Term
people prefer higher incomes to lower incomes
Definition
Why is GDP a good measure of economic well-being?
Term
the value of leisure and the value of a clean environment
Definition
What does GDP exclude?
Term
1 year or 3 months
Definition
The usual intervals of time used to measure GDP (2 answers)
Term
statistical discrepancy
Definition
The difference between the two calculations of GDP
Term
gross national product (GNP)
Definition
the total income earned by a nation’s permanent residents
Term
net national product (NNP)
Definition
the total income of a nation’s residents (GNP) minus losses from depreciation (wear and tear on an economy’s stock of equipment and structures)
Term
personal income
Definition
the income that households and non-corporate businesses receive
Term
disposable personal income
Definition
the income that households and non-corporate businesses have left after taxes and other obligations to the government
Term
Y=C+I+G+NX
Definition
What is the GDP equation?
Term
Y=(nominal GDP/real GDP) X 100
Definition
What is the GDP deflator equation?
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