Measuring GDP and Economic Growth

These flashcards cover key concepts related to GDP and economic growth as discussed in the lecture.

Gross Domestic Product (GDP)

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

Market Value

The value at which goods and services are bought and sold in the market.

Final Goods and Services

Items that are purchased by their final users, as opposed to intermediate goods.

Intermediate Goods

Goods used in the production process to produce final goods.

GDP Deflator

A measure of the level of prices of all new, domestically produced, final goods and services in an economy.

Expenditure Approach

One of the methods used to measure GDP, which calculates it as the sum of consumption (C), investment (I), government spending (G), and net exports (X-M).

Income Approach

A method for measuring GDP that sums the incomes that firms pay households for the factors of production.

Production Approach

A method of measuring GDP by calculating the total value added at each stage of production.

Nominal GDP

The total value of goods and services produced in a country at current prices.

Real GDP

The value of final goods and services produced in a given year, adjusted for inflation.

Gross Investment

The total amount spent on purchases of new capital and on replacing depreciated capital.

Net Investment

The increase in the value of capital, calculated as gross investment minus depreciation.

Circular Flow Model

A model that illustrates the flow of goods and services and money in an economy.

Economic Growth

An increase in the production of goods and services in an economy over time.

Business Cycle

The fluctuations in economic activity that an economy experiences over time.

Standard of Living

The level of wealth, comfort, material goods, and necessities available to a certain socioeconomic class in a certain geographic area.