Economics Ch 8 Kelsey D

Front 1

Total income

Back 1

Wages, rent, interest, profits

Also the annual cost of producing the entire output of final goods and services

Front 2

Final goods and services

Back 2

Will not be transformed into other goods or services

Front 3

GDP

Back 3

Represents the total market value of the nation's annual final product or output produced by factors of production located within national borders

Front 4

Intermediate goods

Back 4

Goods used up entirely in the production of final goods

Front 5

Value added

Back 5

The dollar value contributed to a product at each stage of its production

Front 6

Expenditure approach

Back 6

Computing GDP by adding up the dollar value at current market prices of all final goods and services

Front 7

Expenditure approach

Back 7

Computing GDP by adding up the dollar value at current market prices of all final goods and services

Front 8

Income approach

Back 8

Measuring GDP by adding up all components of national income-wages,rent,interest, profit

Front 9

Durable consumer goods

Back 9

Consumer goods that are used greater than 3 years

Front 10

Durable consumer goods

Back 10

Consumer goods that are used greater than 3 years

Front 11

Non durable consumer goods

Back 11

Lifespan of 3 years

Front 12

Durable consumer goods

Back 12

Consumer goods that are used greater than 3 years

Front 13

Non durable consumer goods

Back 13

Lifespan of 3 years

Front 14

Gross private domestic investment

Back 14

The creation of capital goods, such as factories or machines, that can yeild production and hence consumption in the future.

Also changes in business inventories and repairs made to machines or buildings

Front 15

Producer durables/capital goods

Back 15

Involves a firms purchase of equipment or construction of a new factory

Front 16

Producer durables/capital goods

Back 16

Involves a firms purchase of equipment or construction of a new factory

Front 17

Inventory investment

Back 17

When a firm increases its inventories it is engaging in

Front 18

Fixed investment

Back 18

The purchase of equipment and factories-capital goods-

Front 19

Depreciate or capita consumption allowance

Back 19

The amount that business would have to put aside in order to take care of deteriorating machines and equipment

Front 20

Net domestic product

Back 20

GDP - depreciation

Front 21

Net domestic product

Back 21

GDP - depreciation

Front 22

Indirect businesss taxes

Back 22

All business taxes except the tax on corporate profits. Include sales tax and business prop. Tax

Front 23

Net domestic product

Back 23

GDP - depreciation

Front 24

Indirect businesss taxes

Back 24

All business taxes except the tax on corporate profits. Include sales tax and business prop. Tax

Front 25

Nonincomd expense items

Back 25

The total of indirect business taxes and depreciation

Front 26

Net domestic product

Back 26

GDP - depreciation

Front 27

Indirect businesss taxes

Back 27

All business taxes except the tax on corporate profits. Include sales tax and business prop. Tax

Front 28

Nonincomd expense items

Back 28

The total of indirect business taxes and depreciation

Front 29

National income

Back 29

Income earned by all US factors of production

Front 30

Personal income

Back 30

The anount households receive before personal income taxes

Front 31

Personal income

Back 31

The anount households receive before personal income taxes

Front 32

Disposable personal income

Back 32

Personal income after personal income taxes have been paid

Front 33

Personal income

Back 33

The anount households receive before personal income taxes

Front 34

Disposable personal income

Back 34

Personal income after personal income taxes have been paid

Front 35

Nominal values

Back 35

The values of variables such as GDP and investment expressed in dollars, also called money values, measurement in terms of the actual market prices at which goods and services are sold

Front 36

Personal income

Back 36

The anount households receive before personal income taxes

Front 37

Disposable personal income

Back 37

Personal income after personal income taxes have been paid

Front 38

Nominal values

Back 38

The values of variables such as GDP and investment expressed in dollars, also called money values, measurement in terms of the actual market prices at which goods and services are sold

Front 39

Real values

Back 39

Economics values after adjustments have been made for changes in the average of prices between years

Front 40

Personal income

Back 40

The anount households receive before personal income taxes

Front 41

Disposable personal income

Back 41

Personal income after personal income taxes have been paid

Front 42

Nominal values

Back 42

The values of variables such as GDP and investment expressed in dollars, also called money values, measurement in terms of the actual market prices at which goods and services are sold

Front 43

Real values

Back 43

Economics values after adjustments have been made for changes in the average of prices between years

Front 44

Constant dillars

Back 44

Expressed in terms of real purchasing power, using a particular year as the base or standard or comparison, in contrast to current dollars

Front 45

Personal income

Back 45

The anount households receive before personal income taxes

Front 46

Disposable personal income

Back 46

Personal income after personal income taxes have been paid

Front 47

Nominal values

Back 47

The values of variables such as GDP and investment expressed in dollars, also called money values, measurement in terms of the actual market prices at which goods and services are sold

Front 48

Real values

Back 48

Economics values after adjustments have been made for changes in the average of prices between years

Front 49

Constant dillars

Back 49

Expressed in terms of real purchasing power, using a particular year as the base or standard or comparison, in contrast to current dollars

Front 50

Purchasing power parity

Back 50

Adjustment in exchange rate conversions that takes into account differences in the true cost of living across countries

Front 51

Personal income

Back 51

The anount households receive before personal income taxes

Front 52

Disposable personal income

Back 52

Personal income after personal income taxes have been paid

Front 53

Nominal values

Back 53

The values of variables such as GDP and investment expressed in dollars, also called money values, measurement in terms of the actual market prices at which goods and services are sold

Front 54

Real values

Back 54

Economics values after adjustments have been made for changes in the average of prices between years

Front 55

Constant dillars

Back 55

Expressed in terms of real purchasing power, using a particular year as the base or standard or comparison, in contrast to current dollars

Front 56

Purchasing power parity

Back 56

Adjustment in exchange rate conversions that takes into account differences in the true cost of living across countries

Front 57

Foreign exchange rate

Back 57

Price of one currency in terms of amother

Front 58

Durable consumer goods

Back 58

Cars, furniture

Front 59

Durable consumer goods

Back 59

Cars, furniture

Front 60

Non durable goods

Back 60

Food, gas

Front 61

Durable consumer goods

Back 61

Cars, furniture

Front 62

Non durable goods

Back 62

Food, gas

Front 63

Difference in flow and stock

Back 63

Flow-quantities which is measured in reference to a period of time

Stock-a stock is a quantity measured at a particular point of time

Front 64

Gross and net private domestic investment differences

Back 64

GPD Investment is depreciation minus net domestic product.

Net domestic product is found by subtracting the GDP by depreciation

Front 65

Gross and net private domestic investment differences

Back 65

GPD Investment is depreciation minus net domestic product.

Net domestic product is found by subtracting the GDP by depreciation

Front 66

Recognize whether a transaction is or is not included in gross domestic product

Back 66

GDP-represents total production of a nation within its borders

NOT IN GDP

-sales of goods produced outside our domestic borders

-sales of used goods

-illegal sales of goods and services (black market)

-transfer payments made by gov

-intermediate goods that are used to produce other final goods

Front 67

Recognize where the inability to include an activity in GDP causes our mesasuee to overstate or understate output / economic welfare

Back 67

Two basic approaches to measuring GDP-expenditure approval and the income approach

Front 68

Recognize where the inability to include an activity in GDP causes our mesasuee to overstate or understate output / economic welfare

Back 68

Two basic approaches to measuring GDP-expenditure approval and the income approach

Front 69

List the 3 categories of purely financial transactions

Back 69

-buying and selling of securities

-gov transfer payments

-private transfer payments

Gov transfers-no productive services are currently provided in exchange -social security

Private transfers-transfer of funds from one person to another

-mom giving money

Front 70

Recognize where the inability to include an activity in GDP causes our mesasuee to overstate or understate output / economic welfare

Back 70

Two basic approaches to measuring GDP-expenditure approval and the income approach

Front 71

List the 3 categories of purely financial transactions

Back 71

-buying and selling of securities

-gov transfer payments

-private transfer payments

Gov transfers-no productive services are currently provided in exchange -social security

Private transfers-transfer of funds from one person to another

-mom giving money

Front 72

Distinguish between the expenditure approach and the income approach to get GDP

Back 72

Expen-by adding up the dollar value at current market prices of all final goods and services

-consumption expenditures,investment, gov expenditures, net exports

Income-adding up components of national income/wages, rent, interest, profit

Front 73

Major components of GDP using EXPENDITURE

Back 73

Look at separate components and add them together.

-consumption expenditures,investment,gov. Expenditures and net exports

Consumption- how do we spend our income?

-stable consumer goods, nondurable consumer goods,and services

Investment-uses resources today in such a way that they allow for greater production in future

Gov expenditure-the gov buys goods and services from private firms and pays wages and salaries to gov employees

Net exports= total exports -total imports

Front 74

GDP

Back 74

Consumption + investment + gov expenditures+ net exports

Front 75

GDP

Back 75

Consumption + investment + gov expenditures+ net exports

Front 76

NI

National income

Back 76

Total factor of payments to resource owners

Can be found from NDP by subtracting indirect business taxes and transfers and adding net US income earned abroad and other business income adjustments

Front 77

PI

Personal income

Back 77

Personal income after personal taxes have been paid

Front 78

GDP DEFLATOR

Back 78

Conversion Between real and nominal GDP

Front 79

Im the base year real GDP is equal to nominal GDP

Back 79

Gdp

Front 80

K

Back 80

K