MacroEcon

Government Budget Surplus

When a government collects more in tax revenue than it spends on programs and transfers.

Government Budget Deficit

When a government spends and transfers more than it collects in tax revenue.

Gross Domestic Product (GDP)

The value of the output of all final goods and services produced within a country in a given year.

Components of GDP

Consumer spending, business spending, government spending, and net exports.

Trade Balance

The gap between a country's exports and imports, calculated as exports minus imports.

Trade Surplus

When a country's exports exceed its imports.

Trade Deficit

When a country's imports exceed its exports.

Nominal Value

Economic statistic announced at that time, not adjusted for inflation.

Real Value

Economic statistic adjusted for inflation, typically more important than nominal value.

Double Counting

Output counted more than once as it travels through stages of production, a potential mistake in measuring GDP.

Final Goods and Services

Output used directly for consumption, investment, government, and trade purposes.

Intermediate Goods

Output provided to other businesses at an intermediate stage of production, not included in GDP calculation.

Net International Investment Position (IIP)

Shows total holdings of foreign assets by domestic residents and total holdings of domestic assets by foreign residents.

Debtor Country

A country with a negative international investment position (IIP).

Creditor Country

A country with a positive international investment position (IIP).

Economic Recession

A significant decline in national output/GDP.

Economic Depression

An especially lengthy and deep decline in national output.