disposable income that is not spent on consumption.
- The banking, stock, and bond markets, which
- channel private savings and foreign lending into investment spending,
- government borrowing, and foreign borrowing
- share in the ownership of a company held by a
- borrowing in the form of an IOU that pays
domestic product or GDP
total value of all final goods and services produced in the economy
GDP can be calculated three ways
of all producers
C + I + G + X - IM
factors of production
- total value of the final goods and services
- produced in the economy during a base year
- all final goods and services produced in the
- economy during a given year, calculated using the prices current in the year in
- which the output is produced.
- calculating changes in real GDP
- using the average between the growth rate calculated using an early base year
- and the growth rate calculated using a late base year.
measure of average GDP per person
- measure of the overall level of prices in the
A price index
- ratio of the current cost of that market basket to the cost in a base year,
- yearly percentage change in a price index,
The consumer price index
- measures the cost of the market basket of a
- typical urban American family.
- which measures the price level by calculating
- the ratio of nominal to real GDP.