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Gross Domestic Product (GDP)
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the market value of all final goods and services produced within a country in a given period of time
Social security not part of it
Social security not part of it
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GDP broken down (equation)
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Y= C+I+G+NX
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consumption (C)
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spending by households on goods and services, with the exception of purchases of new housing
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investment (I)
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spending on business capital, residential capital, and inventories
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government purchases (G)
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spending on goods and services by local, state, and federal governments
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Net Exports (NX)
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spending on domestically produced goods by foreigners (exports) minus spending on foreign goods by domestic residents (imports)
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Nominal GDP
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the production of goods and services valued at current prices
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Real GDP
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the production of goods and services valued at constant prices
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GDP deflator
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a measure of the price level calculated as the ratio of nominal GDP to real GDP times 100
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GDP deflator equation
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Nominal GDP/Real GDP x 100
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GDP per capita formula
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(GDP) / (population)
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Consumer Price Index (CPI)
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a measure of the overall cost of the goods and services bought by a typical consumer
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CPI formula
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(Price of basket of goods and services)/ (Price of basket in base year) x 100
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inflation rate
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the percentage rate of change in price level over time
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Inflation Rate Formula
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CPI Year 2 - CPI Year 1/ CPI Year 1 x 100
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Basket
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the weighted average price of a broad cross-section of goods and services
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GDP per capita
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GDP/population
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