AP Macroeconomics Module 2.01

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Consumer Goods

resources acquired for direct use

Capital Goods

resources acquired by businesses to produce consumer goods

Aggregates

combines everything with ‘market value’ into a single number

Revenue

money businesses get from consumers

Product (output) Markets

place consumers buy from businesses

Factor (input) Markets

place businesses buy factors of production (labor, materials)

Transfer Payments

government given money to influence behavior

Double Counting

adding same value twice for a good (bad for economics and is avoided)

Intermediate Goods

good used to make a final good

Durable Goods

long-lasting product (roads, buildings)

Nondurable Goods

immediately consumed product (food, clothing)

Expenditures Approach

sum of all purchases of final goods

Income Approach

sum of all payments for both factors of production and profit

Value-added Approach

difference between inputs and what it sold for