GDP and Economic Measures

Flashcards covering key vocabulary related to GDP, trade balances, and economic measures based on the lecture notes.

Trade Balance

The gap between a country's exports and imports; calculated as exports minus imports (X - M).

Trade Surplus

Occurs when a country's exports are larger than its imports; calculated as exports minus imports.

Trade Deficit

Occurs when a country's imports exceed exports; calculated as imports minus exports.

National Income Accounting Identity

A formula to measure GDP which states GDP = Consumption + Investment + Government + Trade balance (Y = C + I + G + (X - M)).

Durable Goods

Long-lasting goods, such as cars or refrigerators.

Nondurable Goods

Short-lived goods, such as food and clothing.

Services

Intangible products such as entertainment, healthcare, or education.

Structures

Buildings used for different purposes such as residences, factories, and retail stores.

Change in Inventories

Goods that have been produced but not yet sold.

Final Goods and Services

Output used directly for consumption, investment, government, and trade purposes; goods at the furthest stage of production.

Intermediate Goods

Output provided to other businesses at an intermediate stage of production, not for final users; excluded from GDP calculation.

Double Counting

Output that is counted more than once through the stages of production; avoided by only counting final goods and services.

Nominal Value

The actual economic statistic announced at a time, not adjusted for inflation.

Real Value

An economic statistic that has been adjusted for inflation, often considered more important for comparisons.