Basic Concepts of Macroeconomics

Vocabulary flashcards based on the provided macroeconomics lecture notes.

Domestic Territory (Economic Territory)

The geographical territory administered by a government within which persons, goods, and capital circulate freely.

Normal Resident

An individual or institution who ordinarily resides in a country and whose center of economic interest also lies in that country.

Factor Income

Income received by factors of production for rendering factor services in the production process.

Transfer Income

Income received without rendering any productive service in return; a unilateral (one-sided) concept.

Final Goods

Goods used either for consumption or for investment; they are not resold or used for further transformation in the production process.

Intermediate Goods

Goods used either for resale or for further production in the same year.

Consumption Goods

Goods which satisfy the wants of the consumers directly.

Capital Goods

Final goods which help in the production of other goods and services.

Gross Investment

Addition to the stock of capital before making allowance for depreciation.

Depreciation (Consumption of Fixed Capital)

A fall in the value of fixed assets due to normal wear and tear, passage of time, or expected obsolescence.

Net Indirect Tax (NIT)

The difference between indirect taxes and subsidies.

Net Factor Income from Abroad (NFIA)

The difference between factor income received from the rest of the world and factor income paid to the rest of the world.