AP Macroeconomics-Module 10

national income and product accounts

An accounting of consumer spending, sales of producers, business investment spending, and other flows of money between different sectors of the economy; also referred to as national accounts. Calculated by the Bureau of Economic Analysis

household

A person or a group of people who share income

firm

An organization that produces goods and services for sale

product markets

Where goods and services are bought and sold

factor markets

Where resources, especially capital and labor, are bought and sold

consumer spending

Household spending on goods and services from domestic and foreign firms

stock

A share in the ownership of a company held by a shareholder

bond

Loan in the form of an IOU that pays interest

government transfer

Payments by the government to individuals for which no good or services is provided in return

disposable income

Income plus government transfers minus taxes; that total amount of household income available to spend on consumption and saving

private savings

Disposable income minus consumer spending; disposable income that is not spent on consumption but rather goes into financial markets

financial markets

The banking, stock and bond markets, which channel private savings and foreign lending into investment spending, government borrowing, and foreign borrowing

government borrowing

The amount of funds borrowed by the government financial markets to buy goods and services

government purchases of good and services

Total purchases by federal, state, and local governments on goods and services

exports

Goods and services sold to other countries

imports

Goods and services purchased from other countries

inventories

Stocks of goods and raw materials held to satisfy future sales

investment spending

Spending on productive physical capital, such as machinery and construction of structures, and on changes to inventories

final goods and services

Goods and services sold to the final, or end, user

intermediate goods and services

Goods and services, bought from one firm by another firm, that are inputs for production of final goods and services

gross domestic product

The total value of all final goods and services produced in the economy during a given period, usually a year

aggregate spending

The total spending on domestically produced final goods and services; the sum of consumer spending (C), investment spending (I), government purchases of goods and services (G), and exports minus imports (X-IM)

value added

(of a producer) The value of a producer's sales minus the value of the input purchases

net exports

The difference between the value of exports and the value of imports. A positive value for net exports indicates that a country is a net exporter of goods and services; a negative value indicates that a country is a net importer of goods and services.