-
Private savings
disposable income that is not spent on consumption.
-
financial markets.
- The banking, stock, and bond markets, which
- channel private savings and foreign lending into investment spending,
- government borrowing, and foreign borrowing
-
stock
- share in the ownership of a company held by a
- shareholder
-
bond
- borrowing in the form of an IOU that pays
- interest.
-
Gross
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
-
Real GDP
- total value of the final goods and services
- produced in the economy during a base year
-
Nominal
GDP
- 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.
-
Chained
dollars
- 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.
-
GDP per
capita
measure of average GDP per person
-
aggregate
price level
- measure of the overall level of prices in the
- economy
-
A price index
- ratio of the current cost of that market basket to the cost in a base year,
-
inflation
rate
- yearly percentage change in a price index,
-
The consumer price index
- measures the cost of the market basket of a
- typical urban American family.
-
GDP
deflator
- which measures the price level by calculating
- the ratio of nominal to real GDP.
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