Chapter 5 – Measuring The Economy's Output Flashcards Preview

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Flashcards in Chapter 5 – Measuring The Economy's Output Deck (40)
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0
Q

GDP

A

The total market value of all final goods and services produced annually within the boundaries of Canada.

1
Q

National income accounting

A

The techniques used to measure the overall production of the economy and other related variables for the nation as a whole.

2
Q

Intermediate goods

A

Products purchased for resale or further processing or manufacturing.

3
Q

Final goods

A

Goods and services purchased for final used and not for resale or further processing or manufacturing.

4
Q

Multiple counting

A

Wrongly including the value of intermediate goods in the GDP.

5
Q

Value added

A

The value of the product sold by a firm, less the value of the product purchased and used by the firm to produce the product.

6
Q

Expenditures approach

A

The method to measure GDP that adds up all the expenditures made for final goods and services.

7
Q

Income approach

A

The method to measure GDP that adds up all the income generated by the production of final goods and services.

8
Q

Personal consumption expenditures

A

The expenditures of household for durable and nondurable consumer goods and services.

9
Q

Durable goods

A

Product with expected lives of three years or more.

10
Q

Nondurable goods

A

Product with expected lives of less than three years.

11
Q

Services

A

The work done by service providers.

12
Q

Gross investment

A

Expenditures for newly produced capital goods such as machinery, equipment, tools, and buildings, and for additions to inventories.

13
Q

Noninvestment transaction

A

An expenditure for stocks, bonds, or secondhand capital goods.

14
Q

Net investment

A

Gross investment - consumption of fixed capital.

15
Q

Capital consumption allowance

A

Estimate of the amount of capital worn-out are used up in producing the GDP; also called depreciation.

16
Q

Capital shock

A

The total available capital in the nation.

17
Q

Government purchases

A

The expenditures of all government and the economy for final goods and services.

18
Q

Government Transfer payment

A

The disbursement of money by government which government receives no currently produced a good or service in return.

19
Q

Exports

A

Goods and services produced in a nation and sold to customers in other nations.

20
Q

Imports

A

Spending by individuals, friends, and government for goods and services produced in foreign nations.

21
Q

Net exports

A

Exports minus imports.

22
Q

National income

A

Total income earned by resource suppliers for the contributions to gross national product; equal to the GDP minus non income charges, minus net foreign factor in town.

23
Q

Corporate income tax

A

A tax levied on the net income of corporations.

24
Q

Undistributed corporate profits

A

After-tax corporate profits not distributed as dividends to shareholders; corporate or business savings; also called retained earnings

25
Q

Interest income

A

Payments of income to those who supplied the economy with capital.

26
Q

Indirect taxes

A

Sales taxes, business property taxes, and customs duties, which firms treat as cost of producing a product.

27
Q

Sales tax

A

A tax levied on the cost of a broad group of products.

28
Q

Consumption of fixed capital

A

Estimate of the amount of capital worn-out or used up in producing the gross domestic product; also called depreciation.

29
Q

Personal income or PI

A

The earned and unearned income available to reserve suppliers and others before the payment of personal income taxes

30
Q

Personal income tax

A

The tax levied on the taxable income of individuals, households, and unincorporated firms.

31
Q

Disposable income or DI

A

Personal income minus personal taxes.

32
Q

The value of money

A

The quantity of goods and services for which a unit of money can be exchanged; the purchasing power of the unit of money; the reciprocal of the price level.

33
Q

Nominal GDP

A

GDP measured in terms of the price level at the time of measurement.

34
Q

Real GDP

A

Nominal GDP adjusted for inflation.

35
Q

Price Index

A

And index number that shows how the weighted average price of the market basket of goods and services changes through time.

36
Q

Base year

A

The year with which other years are compared when an index is constructed; for example, the base year for a price index.

37
Q

Deflating

A

Finding the real GDP by increasing the dollar value of the GDP for year in which prices were higher than in the base year.

38
Q

Inflating

A

Determining real GDP by increasing the dollar value of the nominal GDP in the year in which prices are lower than in the base year.

39
Q

GDP deflator

A

An implicit price index calculated by dividing nominal GDP by real GDP and multiplying by 100