Principles of Macroeconomics Chapter 6

Data collected and published by the government describing the various components of national income and output in the economy

The total market value of all final goods and services produced with a given period by factors of production located within a country

Goods and services produced for final use

Goods that are produced by one firm for use in further processing by another firm

Value of Sales – Value of Intermediate Inputs

The total market value of all final goods and services produced within a given period by factors of production owned by a country’s citizens, regardless of where the output is produced

A method of computing GDP that measures the total amount spent on all final goods and services during a given period

A method of computing GDP that measures the income- wages, rents, interest, and profits- received by all factors of production in producing final goods and services

Expenditures by consumers on goods and services

Goods that last a relatively long time, such as cars and household appliances

Goods that are used up fairly quickly, such as good and clothing

The things we buy that do not involve the production of physical things, such as legal and medical ______ and education

Total investment in capital- that is, the purchase of new housing, plants, equipment, and inventory by the private (or nongovernment) sector

Expenditures by firms for machines, tools, plants, and so on

Expenditures by households and firms on new houses and apartment buildings

The amount by which firms’ inventories change during a period. Inventories are the goods that firms produce now but intend to sell later

The amount an asset’s value falls in a given period

The total value of all newly produced capital goods (plants, equipment, housing, and inventory) produced in a given period

Gross Investment – Depreciation

Expenditures by federal, state, and local governments for final goods and services

The difference between exports (sales to foreigners of U.S. – produced goods and services) and imports (U.S. purchases of goods and services from abroad). The figure can be positive or negative

The total income earned by the factors of production owned by a country’s citizens

Includes wages, salaries, and various supplements- employer contributions to social insurance and pension funds, for example- paid to households by firms and by the government

The income of unincorporated businesses

The income received by property owners in the form of rent

The income of corporations

The interest paid by business

Taxes such as sales taxes, customs duties, and license fees less subsidies that the government pays for which it receives no goods or services in return

Net transfer payments of businesses to others

Income of government enterprises

gross national product – depreciation; a nations product minus what is required to maintain the value of its capital stock

Data measurement error

The total income of households

Personal Income – Personal Income Taxes. The amount that households have to spend or save

The amount of disposable income that is left after total personal spending in a given period

The percentage of disposable personal income that is saved. If the personal saving rate it low, households are spending a large amount relative to their incomes; if its is high, households are spending cautiously

The current prices that we pay for goods and services

Gross Domestic Product measured in current dollars

The importance attached to an item within a group of items

The year chosen for the weights in a fixed-weight procedure

A procedure that uses weight from a given base year

The part of the economy in which transactions take place and in which income is generated that is unreported and therefore not counted in GDP

GNP converted into dollars using an average of currency exchange rates over several years adjusted for rates of inflation