Chapter 6: Introduction to Macroeconomics and Gross Domestic Product

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Posted on

March 13th, 2023

question

Gross domestic product (GDP)

answer

The market value of all final goods and services produced within a nation during a specific period of time - typically a year.

question

Three uses of GDP data

answer

1) Measuring living standards
2) Measuring economic growth
3) Measuring Business Cycles

question

Per capita GDP

answer

GDP per person (divide country's total GDP by its population)

question

Inflation

answer

The growth in the overall level of prices in an economy

question

Real GDP

answer

GDP adjusted for changes in prices

question

Economic growth

answer

Measured as the percentage change in real per capita GDP

question

Recessions

answer

Short term economic downturns that typically last about 6 to 18 months

question

Great Recession

answer

The US recession that began in 2007 and lasted into 2009

question

Business cycles

answer

Short run fluctuations in economic activity

question

Economic expansion

answer

Occurs from the bottom of a trough to the next peak, when the economy is growing faster than usual

question

Economic contraction

answer

The period extending from the peak downward to the trough; during this phase, the economy is growing at a slower rate than usual

question

Services

answer

Outputs that provide benefits without the production of a tangible product

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Intermediate goods

answer

Goods that firms repackage or bundle with other goods for sale at a later stage

question

Final Goods

answer

Goods that are sold to final users

question

Gross national product (GNP)

answer

Output produced by workers and resources owned by residents of the nation

question

GDP equation

answer

GDP = C + I + G + NX

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Consumption

answer

The purchase of final goods and services by households, with the exception of new housing

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Investment

answer

Refers to private spending on tools, plant, and equipment used to produce future output

question

Government Spending

answer

Includes spending by all levels of government on final goods and services

question

Net Exports

answer

Exports minus imports of final goods and services (exports - imports)

question

Nominal GDP

answer

GDP calculated from current prices

question

Price level

answer

An index of the average prices of goods and services throughout the economy

question

GDP deflator

answer

Includes the prices of the final goods and services counted in GDP

question

Shortcomings of GDP data

answer

1) Non market goods
2) Under ground economy
3) Quality of the environment
4) Leisure time

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question

Gross domestic product (GDP)

answer

The market value of all final goods and services produced within a nation during a specific period of time - typically a year.

question

Three uses of GDP data

answer

1) Measuring living standards
2) Measuring economic growth
3) Measuring Business Cycles

question

Per capita GDP

answer

GDP per person (divide country's total GDP by its population)

question

Inflation

answer

The growth in the overall level of prices in an economy

question

Real GDP

answer

GDP adjusted for changes in prices

question

Economic growth

answer

Measured as the percentage change in real per capita GDP

question

Recessions

answer

Short term economic downturns that typically last about 6 to 18 months

question

Great Recession

answer

The US recession that began in 2007 and lasted into 2009

question

Business cycles

answer

Short run fluctuations in economic activity

question

Economic expansion

answer

Occurs from the bottom of a trough to the next peak, when the economy is growing faster than usual

question

Economic contraction

answer

The period extending from the peak downward to the trough; during this phase, the economy is growing at a slower rate than usual

question

Services

answer

Outputs that provide benefits without the production of a tangible product

question

Intermediate goods

answer

Goods that firms repackage or bundle with other goods for sale at a later stage

question

Final Goods

answer

Goods that are sold to final users

question

Gross national product (GNP)

answer

Output produced by workers and resources owned by residents of the nation

question

GDP equation

answer

GDP = C + I + G + NX

question

Consumption

answer

The purchase of final goods and services by households, with the exception of new housing

question

Investment

answer

Refers to private spending on tools, plant, and equipment used to produce future output

question

Government Spending

answer

Includes spending by all levels of government on final goods and services

question

Net Exports

answer

Exports minus imports of final goods and services (exports - imports)

question

Nominal GDP

answer

GDP calculated from current prices

question

Price level

answer

An index of the average prices of goods and services throughout the economy

question

GDP deflator

answer

Includes the prices of the final goods and services counted in GDP

question

Shortcomings of GDP data

answer

1) Non market goods
2) Under ground economy
3) Quality of the environment
4) Leisure time

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