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Chapter 5: Production,Income
PRoduction,Income,Employment
27
Economics
Undergraduate 1
10/18/2007

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Term
Gross Domestic product
Definition
The total vlaue of all final goods and services produced for the market place during a given year within the nations borders
Term
Intermediate goods
Definition
Goods used up in producing final goods
Term
Final good
Definition
A good ssold to its final user
Term
Expenditure approach
Definition
Measuring GDP by adding the value of goods and services by each type of final user
Term
Comsumption
Definition
The part of GDP that is purchases by househoolds as final users
Term
Capital stock
Definition
The total value of all goods that will provide useful services in future years
Term
Private Investment
Definition
The sum of business plant, equipment, and software purchases, new-home construction and inventoryy changes, often reffered to as just investment
Term
Government purchases
Definition
Spending by federal, state and local government on goods and services
Term
Transfer payment
Definition
Any payment that is not compensation form supplying good or services
Term
Net Exports
Definition
Total Exports minus total imports
Term
Value Added
Definition
 The revenue a firm recieves minus the cost of the intermiated goods it buys
Term
Value added approach
Definition
Measuring GDP by summing the calue added by all firms in the economy
Term
Factor paymentrs
Definition
Payments to the owners of resources that are used in production
Term
Factor payment Approach
Definition

Measuring GDP by summing the facor payments earned by all households in the economy

Term
Nominal variable
Definition
A variable measured without adjustment for the dollars changing value
Term
Real variable
Definition
A varialb eadjusted for changes in the dollars value
Term
Nonmarket production
Definition
Goods and services that are produced but not sold in a market
Term
Frictional Unemployment
Definition
Joblessness experienced by ppl who are between jobs, or reentering the workplace
Term

Seasonal Unemployment

Definition

Joblessness releated to changes in weatrher, tourist patterns or other factors

Term
Structural Unemployment
Definition
Joblessness arising form missmatches between workers skills and employers requirments or  locations
Term
Cyclical unemployment
Definition
Joblessness arising from changes in production over the businnes cycle
Term
Full employment
Definition
A situation where there is no cyclical unemployment
Term
Potential output
Definition
The level of output hte economy could produce if operating at full employment
Term
Labor force
Definition
Those people who have a job or who are looking for one
Term
Unemployment rate
Definition
The fraction of the labour force that is without a job
Term
Involuntary part time workers
Definition
individuals who would like ot work a full time job but are working only part time
Term
Discouraged workers
Definition
Individuals who woudl like a job but have given up searching for one
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