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national income and product accounts or national accounts
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keeps track of the flows of money between different sectors of the economy
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government purchases of goods and services
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total expenditures on goods and services by federal, state, and local governments
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consumer spending
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household spending on goods and services
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investment spending
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spending on productive physical capital, such as machinery and construction of structures, and on changes to inventories
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Exports
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Goods and Services sold to other countries
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Imports
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goods and services purchased from other countries
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final goods and services
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goods and services sold to the final, or end, user
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intermediate goods and services
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goods and services bought from one firm by another firm to be used as inputs into the production of final goods and services
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Gross Domestic Product (GDP)
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the total value of final goods and services produced in a country in a given year
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aggregate spending
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the sum of consumer spending, investment spending, government purchases of goods and services, and exports minus imports, is the total spending on domestically produced final goods and services in the economy
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Value Added
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the value of its sales minus the value of its purchases of intermediate goods and services
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net exports
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exports minus imports
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Nominal GDP
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the value of all final goods and services produced in the economy during a given year, calculated using the prices current in the year in which the output is produced
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chained dollars
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is the method of calculating changes in real GDP using the average between the growth rate calculated using an early base year and the growth rate calculated using a late base year.
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GDP per capita
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GDP divided by population
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aggregate output
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the total quantity of final goods and services produced within an economy
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Real GDP
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the total value of all final goods and services produced in the economy during a given year, calculated using the prices of a selected base year
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aggregate price level
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a measure of the overall level of prices in the economy
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market basket
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a hypothetical set of consumer purchases of goods and services
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price index
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measures the cost of purchasing a given market basket in a given year. The index value is normalized so that it is equal to 100 in the selected base year
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inflation rate
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the percent change per year in a price index- typically the consumer price index
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Consumer Price Index (CPI)
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measures the cost of the market basket of a typical urban American family
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Producer Price Index (PPI)
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measures changes in the prices of goods purchased by producers
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GDP inflator
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a price measure for a given year that is equal to 100 times the ratio of nominal GDP to real GDP in that year
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