Economics: Unit 5 Learning Target 1 - "Macroeconomics, Macroeconomic Goals & Gross Domestic Product" Vocabulary

Macroeconomics

The study of economy-wide phenomena, including inflation, unemployment, and economic growth.

Gross Domestic Product

Represents the market value of all final goods/services produced within a nation during a specific time period.

Real Gross Domestic Product (Real GDP)

A measure of the value of all the goods and services newly produced in a country during some period of time, adjusted for changes in prices over time. The Formula for finding Real GDP from Nominal GDP is (Nominal GDP amount x 100) / The GDP Deflator. The GDP Deflator is always given to you.

Nominal Gross Domestic Product (Nominal GDP)

Represents the market value of all final goods/services produced within a nation during a specific time period at current prices.

Consumption

Spending by households on new, final goods & services in a given time period.

Investment

Spending by businesses today on new, final goods and services to increase production in the future in a given time period.

Government Spending

Spending by all levels of government (local, state, federal) on final goods and services in a given time period.

Net Exports

The dollar value of exports of new, final goods and services minus the dollar value of imports of new, final goods and services in a given time period.

Economic Growth

The ability of the economy to increase the production of goods and services. Measured by the Real GDP Growth Rate.

Real GDP Growth Rate

(Real GDP in Current Year - Real GDP in the previous year)/ Real GDP in the previous year.
Shows the amount of Economic Growth in a society in a given time period.

Capital Deepening

An increase in the average level of physical and/or human capital per person. Will usually lead to economic growth.

Intermediate Goods

Goods used in the production of final goods/services. The value of these goods ARE NOT counted in a country's GDP.

Transfer Payments

One-way payment of money for which no service or good is exchanged. The value of these payments ARE NOT counted in a country's GDP.