Macroecon Chap 5-8

Front 1

what is GDP?

Back 1

the market value of all final goods and services produced within a country in a given period of time

Front 2

what two things does gross domestic product measure?

Back 2

it measures the total income of everyone in the economy and the total expenditure on the economy's output of goods and services

Front 3

how does GDP measure two things at once?

Back 3

it performs the trick of measuring two things (income and expenditures) at once because these two things are really the same. For an economy as a whole, income must equal expenditure.

Front 4

what are the four components of GDP?

Back 4

Y=C+I+G+NX
GDP = consumption(C) + investment (I) + government purchases (G) + and net exports (NX)

Front 5

define consumption

Back 5

spending by households on goods and services, with the exception of purchases of new housing

Front 6

define investment

Back 6

spending on capital equipment, inventories, and structures, including household purchases of new housing

Front 7

define government purchases

Back 7

spending on goods and services by local, state, and federal governments

Front 8

define net exports

Back 8

spending on domestically produced goods by foreigners (exports) minus spending on foreign goods by domestic residents (imports)