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What is microeconomics?
Microeconomics considers the behavior of individual people, firms, and industries.
What is macroeconomics?
Macroeconomics is the study of the economy of an entire nation or society.
What does GDP stand for?
Gross Domestic Product.
What is GDP?
GDP is the market value of all final goods and services produced within a country during a specific period.
What constitutes the production and income relationship in GDP?
Production equals income.
Define final goods and services.
Final goods are sold to final users, while services are intangible outputs.
What are intermediate goods?
Intermediate goods are goods repackaged or bundled with other goods for sale at a later stage.
What does Gross National Product (GNP) measure?
GNP measures output produced by workers and resources owned by residents of the nation.
What does the Bureau of Economic Analysis (BEA) do?
The BEA computes GDP data through a process called national income accounting.
What is the formula for national income accounting?
Y = C + I + G + NX, where Y = output (GDP), C = consumption, I = investment, G = government purchases, NX = net exports.
What are durable goods?
Durable goods are consumed over a long period of time, such as vehicles and appliances.
What are non-durable goods?
Non-durable goods are consumed over a short period of time, such as food and clothing.
What is the difference between nominal GDP and real GDP?
Nominal GDP is measured in current prices, while real GDP is adjusted for changes in prices.
What is the GDP deflator?
The GDP deflator is a measure of the price level used to calculate real GDP.
What is a business cycle?
A business cycle is a short-run fluctuation in economic activity (Real GDP).
What defines a recession?
A recession is a short-term economic downturn identified as a fall in real GDP in two consecutive quarters.
What are some shortcomings of GDP data?
Shortcomings include non-market goods, the underground economy, environmental quality, and leisure time.
What is per capita GDP?
Per capita GDP is GDP per person, calculated as GDP divided by the population.
What is economic expansion?
Economic expansion is an increase in economic activity (Real GDP).
What is economic contraction?
Economic contraction is a decrease in economic activity (Real GDP).
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