Macroeconomics - Measuring A Nation's Income

Front 1

consumption

Back 1

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

Front 2

GDP deflator

Back 2

A measure of the price level calculated as the ratio of nominal GDP to real GDP times 100.

Front 3

government purchases

Back 3

Spending on goods and services by local, state, and federal governments.

Front 4

gross domestic product (GDP)

Back 4

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

Front 5

investment

Back 5

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

Front 6

macroeconomics

Back 6

The study of economy-wide phenomena, including inflation, unemployment, and economic growth.

Front 7

microeconomics

Back 7

The study of how households and firms make decisions and how they interact in markets.

Front 8

net exports

Back 8

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

Front 9

nominal GDP

Back 9

The production of goods and services valued at current prices.

Front 10

real GDP

Back 10

The production of goods and services valued at constant prices.

Front 11

Why is real GDP a more accurate measure of an economy's production than nominal GDP?

Back 11

Real GDP is not influenced by price changes, but nominal GDP is.