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11 Cards in this Set

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consumption
Spending by households on goods and services, with the exception of purchases of new housing.
GDP deflator
A measure of the price level calculated as the ratio of nominal GDP to real GDP times 100.
government purchases
Spending on goods and services by local, state, and federal governments.
gross domestic product (GDP)
The market value of all final goods and services produced within a country in a given period of time.
investment
Spending on capital equipment, inventories, and structures, including household purchases of new housing.
macroeconomics
The study of economy-wide phenomena, including inflation, unemployment, and economic growth.
microeconomics
The study of how households and firms make decisions and how they interact in markets.
net exports
Spending on domestically produced goods by foreigners (exports) minus spending on foreign goods by domestic residents (imports).
nominal GDP
The production of goods and services valued at current prices.
real GDP
The production of goods and services valued at constant prices.
Why is real GDP a more accurate measure of an economy's production than nominal GDP?
Real GDP is not influenced by price changes, but nominal GDP is.