 | Economics 14/e McConnell | |||||
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| Economics 14/e McConnell | |||||
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national income
Total income earned by resource suppliers for their contributions to gross national product; equal to the gross domestic product minus nonincome charges minus net foreign factor income.
national income accounting
Similar to household or business accounting, but on a national scale. National Income Accounting allows us to assess the health of the economy and formulate policies to maintain and improve that health.
gross domestic product
The total market value of all final goods and services produced annually within the boundaries of the United States whether by U.S. or
foreign-supplied resources.
final goods
Goods and services which have been purchased for final use and not for resale or further processing or manufacturing.
intermediate goods
Products which are purchased for resale or further processing or manufacturing.
multiple counting
Wrongly including the value of intermediate goods in the gross domestic product; counting the same good or service more than once.
value added
The value of the product sold by a firm less the value of the products (materials) purchased and used by the firm to produce the product.
expenditures approach
The method which adds all expenditures made for final goods and services to measure the gross domestic product.
income approach
The method that adds all the income generated by the production of final goods and services to measure the gross domestic product.
personal consumption expenditures
The expenditures of households for durable and nondurable consumer goods and services.
gross private domestic investment
Expenditures for newly produced capital goods (such as machinery equipment tools and buildings) and for additions to inventories.
net private domestic
Gross private domestic investment less consumption of fixed capital; the addition to the nation’s stock of capital during a year.
investment
Spending for the production and accumulation of capital and additions to inventories.
government purchases
Disbursements of money by government for which government receives a currently produced good or service in return; the expenditures of all governments in the economy for final goods and services.
net exports
Exports minus imports.
indirect business taxes
Such taxes as sales excise and business property taxes license fees and tariffs which firms treat as costs of producing a product and pass on (in whole or in part) to buyers by charging higher prices.
consumption of fixed capital
Estimate of the amount of capital worn out or used up (consumed) in producing the gross domestic product; also called depreciation.
net domestic product
Gross domestic product less the part of the year’s output which is needed to replace the capital goods worn out in producing the output; the nation’s total output available for consumption or additions to the capital stock.
personal income
The earned and unearned income available to resource suppliers and others before the payment of personal taxes.
disposable income
Personal income less personal taxes; income available for personal consumption expenditures and personal saving.
nominal GDP
The GDP measured in terms of the price level at the time of measurement (unadjusted for inflation).
real GDP
(See Real gross domestic product.)
price index
An index number which shows how the weighted average price of a “market basket” of goods changes through time.
consumer price index
An index which measures the prices of a fixed “market basket” of some 300 goods and services bought by a “typical” consumer.
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