Macroeconomics - Measuring GDP and Economic Growth

These flashcards cover essential vocabulary related to GDP and economic growth as discussed in the lecture.

Gross Domestic Product (GDP)

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

Final Goods and Services

Goods and services that are purchased by their final user during a specified time period.

Intermediate Goods

Items produced by one firm, bought by another firm, and used as components of final goods or services.

Circular Flow Model

A diagram that illustrates the transactions among households, firms, governments, and the rest of the world.

Expenditure Approach

Measures GDP as the sum of consumption expenditure, investment, government expenditure on goods and services, and net exports.

Income Approach

Measures GDP by summing the incomes that firms pay households for the factors of production they hire.

Real GDP

The value of final goods and services produced in a given year when valued at the prices of a reference base year.

Nominal GDP

The value of goods and services produced during a given year valued at the prices that prevailed in that same year.

Business Cycle

A periodic but irregular up-and-down movement of total production and other measures of economic activity.

Expansion

A period during which real GDP increases, moving from a trough to a peak.

Recession

A period during which real GDP decreases, with its growth rate being negative for at least two successive quarters.