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Gross Domestic Product DGP
The market value of all final goods and services produced in a nation during a period of time, usually a year.
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Transfer Payment
A goverment payment to individuals not it exchange for goods or sercives currently produced.
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Final goods
Finished goods and services produced for the ultimate user.
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Intermediate goods
Goods and services used as inputs for the production of final goods
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Flow
A flow is the rate of change in a quantity during a given time period, such as dollars per year. For example, income and consumptios are flows that accour per week, per month, or per year.
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Stock
A quantity measured at one point in time. For example, an inventory of goods or the amount of money in a checking account.
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Expenditure approach
The national income accounting method that measures GDP by adding all the spending for final goods during a period of time.
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Expenditure approach accounts
- Personal Consumption expenditures (C)Gross private domestic investment (I)Gov consumption expenditues and gross investment (G)Net exports of goods and services (X - M)
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Income Approach
The national income accounting method that measures GDP by adding all incomes, including compensations of employees, rents, net interest and profits.
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Income Approach accounts
- Compensations of employees
- Rental Income
- Profits
- Net Interest
- Indirect Business Taxes
- Depreciation
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Indirect business Taxes
Taxes levied as a % of the prices of goods sold and therefore collected as part of the firm's revenue. Firms treat such taxes as production cost. Example include general taxes, excise taxes, and costoms duties.
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The Underground Economy
Illegal gambling, prostitution, loan-sharking, illegal guns, illegal drugs are examples af underground economy
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National Income
The total income earned by resources owners, including wages, rents, interest and profits. NI is calculated as GDP minus depreciation of the capital worn out in producing output.
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Persoal Income (PI)
The total income received by households that is available for consumption, savings, and payment of personal taxes.
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Disposable personal income (DI)
The amount of income that housholds actually have to spend or save after payment of personal taxes.
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Nominal GDP
The value all final goods based on the prices existing during the time period of production.
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Real GDP
The value of all final goods produced during a given time period based on the priced existing in a selected base year.
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GDP chain price index
A measures that compares changes in the prices of all final goods during a given year to the prices of those goods in a base year.
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