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10 Cards in this Set
- Front
- Back
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gross domestic product [GDP]
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which is the market value of all final goods & services produced in a nation during a period of time.
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gross national profit [GNP]
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the market value of all final goods and services produced by a nation's residents no matter where they are located.
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final goods
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finished goods andtne services produced for the ultimate user
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circular flow model
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a diagram showing the flow of products from businesses to households and the flor of resourced from households to businesses. In exchange for these resources, money payments flow between businesses and households.
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circular flow model. the upper half is, and the lower half is?
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upper half: product markets
business -> households lower half: factor markets households -> business |
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intermediate goods
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are goods and services used as inputs for the production of final goods.
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expenditure approach
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the national income accounting method that measures GDP by adding the spending for final goods during a period of time.
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Formula for GDP
[upper loop] |
GDP=C+I+G+(x-m)
c=consumption I=investment G=gross investment (x-m)=net exports |
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income approach
[lower loop] |
GDP= compensation of employees
+ rents +profits +net interest + indirect taxes + depreciation |
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national income [ni]
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NI= GDP - depreciation [consumption of fixed capital]
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