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Economics- Ch23
n.a
19
Economics
Not Applicable
12/18/2011

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Term
what is Microeconomics?
Definition
The study of how individual households and firms make decisions, interact with one another in markets
Term
What is Macroeconomics?
Definition
the study of the system as a whole
Term
Gross Domestic Product = _ _ _
Definition
GDP
Term
GDP or Gross Domestic Product is...
Definition
the measure of the total income of everyone in the economy.
Term
labor, land, capital, and natural resources are...
Definition
inputs; "Factors of production"
Term
Factor payments are payments to the... what?
Definition
Factors of production (e.g., wages, rent)
Term
____________________ is the market value of all final goods & services produced within a country in a period of time
Definition
Gross Domestic Product(GDP)
Term
what are Final goods?
(think pizza)
Definition
intended for the end user
Term
what are Intermediate goods?
(again think pizza)
Definition
used as components or ingredients in the production of other goods
Term
what are the 4 components of GDP?
Definition
Consumption (C), Investment (I), Government Purchases (G) and Net Exports (NX)
Term
_______________ = total spending by households; includes rent payments but not purchase price or mortgage payments
Definition
Consumption (C)
Term
______________ = total spending on good that will be used in the future to produce more goods
Definition
Investment (I)
Term
_______________ = all spending on the g&s purchased by govt at the federal, state and local level
Definition
Government Purchases (G)
Term
______________ = exports-imports
(GDP) Y=C+I+G+NX
Definition
Net Exports (NX)
Term
Nominal GDP-
Definition
values output using current prices; not corrected
Term
Real GDP-
Definition
values output using the prices of a base year; is corrected for inflation
Term
what is the GDP Deflator?
Definition
100 x (nominal GDP )/(real GDP)
Term
__________________ computes the percentage increase in the GDP deflator from one year to the next
Definition
Inflation rate
Term
GDP Does Not Value:
Definition
- the quality of the environment
- leisure time
- non-market activity, such as the child care a parent provides his or her child at home
- an equitable distribution of income
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