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11 Cards in this Set
- Front
- Back
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GDP is the
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TOTAL MARKET VALUE of all FINAL GOODS AND SERVICES produced within the DOMESTIC economy over A SPECIFIC PERIOD OF TIME (Usually a year)
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The equation for GDP is
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y= C + I + G + NX
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Personal Consumption Expenditures (C) are
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expenditures by households on durable consumer goods, non-durable consumer goods and services. (e.g. Cars, fridge, milk and clothes)
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Gross Private Investment (I) is
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Private gross fixed capital expenditure plus increases in stocks (e.g. purchase of machinery, equipment and tools)
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Government purchases of Goods and Services (G) is
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The sum of government final consumption expenditure, government gross fixed capital expenditure and the increase in stocks of authorities.
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Net Exports (NX) is
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The difference between the value of exports and imports (X-M) (How much foreign spending on Australian goods and services exceeds Australian spending on foreign goods and services
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Real GDP is
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GDP after adjusting for inflation (Nominal GDP/Price Index)
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Money (Nominal GDP) is
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GDP measured in current prices
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Consumer Price Index
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measures the price level of a 'market basket' of goods and services for the average family
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Non-market transactions are
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productive transactions that are not reflected in the GDP
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Examples of non-productive transactions are
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Leisure time, quality of products, per capita output, underground economy and home production
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