Measuring Economic Activity: GDP and Unemployment

A collection of vocabulary flashcards based on key concepts from the lecture on measuring economic activity, focusing on GDP and unemployment.

Gross Domestic Product (GDP)

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

Market Value

An aggregate measure of quantities produced, where more expensive items receive a higher weighting.

Final Goods and Services

Goods and services consumed by the ultimate user and included in GDP.

Intermediate Goods and Services

Goods used up in the production of final goods, not included in GDP to avoid double counting.

Value Added

The market value of a product minus the cost of inputs purchased from other firms.

Expenditure Method for Measuring GDP

A method to measure GDP based on the total amount spent on final goods and services.

Consumption Expenditure

Spending by households for goods and services.

Investment

Spending by firms on final goods and services, which includes business fixed investment, residential investment, and inventory investment.

Net Exports

Calculated as exports minus imports; reflects a country's trade balance.

Real GDP

Values output in the current year using the prices from a base year, measuring the physical volume of production.

Nominal GDP

Values output in the current year using current prices, representing the dollar value of production.

Government Purchases

Final goods and services bought by government entities, excluding transfer payments.

Transfer Payments

Payments made by the government for which no current goods or services are received, like Social Security.