econ chapter 23

Macroeconomics

The branch of economics that deals with statistics about the entire economy, including GDP, exports, total income, inflation, and unemployment.

Gross Domestic Product (GDP)

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

Final Goods

Goods that have completed the production process and are ready for sale to the end user.

Intermediate Goods

Goods that are used to produce final goods and are not counted in the GDP.

Nominal GDP

The value of goods and services produced in a year measured using current prices.

Real GDP

The value of goods and services produced in a year using constant base-year prices.

Components of GDP

The equation Y = C + I + G + NX, where Y is GDP, C is consumption, I is investment, G is government spending, and NX is net exports.

Statistical Discrepancy

The difference between the income method and the expenditure method of calculating GDP, often due to differences in data sources.

GDP Deflator

An index that measures the current level of prices relative to the level of prices in a base year.

Net Exports

The value of a country's total exports minus its total imports.

Investment (in GDP terms)

The purchase of goods that will be used in the future to produce more goods and services.

Consumption (in GDP terms)

Spending by households on goods and services.

Government Spending

Spending on goods and services by local, state, and federal governments, excluding transfer payments.

Economic Well-Being and GDP

GDP may not measure some valuable aspects of well-being, such as leisure versus work and environmental impacts.

Inflation Rate

The percentage change in the price level, often calculated using the GDP deflator.

Seasonal Adjustment of GDP

Modifying GDP data to account for seasonal fluctuations in production and sales.