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the study of economy of an entire nation or society. Study of broader economy
the study of individual people, firms, and industries. You study what people buy, what jobs they take, and how they distribute their income between purchases and savings
Gross Domestic Product (GDP)
the market value of all final goods and services produced within a country during a specific period
Three uses of GDP
-Measuring Living Standards
-Measuring Economic Growth
-Measuring Business Cycles
Per Capita GDP
GDP per person
the growth in overall level of prices in an economy
Real GDP
GDP adjusted for changes in prices
Economic Growth
measured as the percentage change in real per capita GDP
a short-term economic downturn
Great Recession
the U.S recession lasting from December 2007 to June 2009
Business cycle
a short-run fluctuation in economic activity
Economic Expansion
a phase of the business cycle during which the economy is growing faster than usual
Economic Contraction
a phase of the business cycle during which the economy is growing more slowly than usual
an output that provides benefits without the production of a tangible product
Intermediate good (s)
a good that firms repackage or bundle with other goods for sale at a later stage
Final goods
a good sold to final users
Gross National Product (GNP)
the output produced by workers and resources owned by residents of the nation
the purchase of final goods and services by households, excluding new housing
Non-durable goods
goods that are consumed over a short period
Durable Goods
goods that are consumed over a long period
private spending on tools, plant, and equipment used to produce future output
Government spending
spending by all levels of government on final goods and services
Net Exports
exports minus imports of final goods and services
Nominal GDP
GDP measured in current prices, and not adjusted for inflation
Price Level
an index of the average prices of goods and services throughout the economy
GDP Deflator
a measure of the price level that includes prices of the final goods and services included in GDP
Shortcomings of GDP
-Non-Market Goods
-Underground Economy
-Quality of Environment
-Leisure Time
Categories: Macroeconomics