Wednesday, January 19, 2011

Post21: Vocab list

National income accounting - the process used for tracking production, income, and consumption in a nation's economy.

Gross domestic product (GDP) – the total dollar value of all final goods and services produced within a country in a given year.

Output-expenditure model - a method of computing the gross domestic product (GDP) by adding the total value of consumer and government spending on goods and services, total private investment, and total value of exports, and then subtracting the total value of imports. 

Personal consumption expenditure - total spending by consumers for durable goods, nondurable goods, and services during a specified period of time. 

Gross investment - the total value of private spending in the economy for capital assets- such as new equipment, machinery, and buildings- over a specified period of time, plus total changes in business inventories. 

Nominal GDP- the value of a nation's gross domestic product (GDP) at the current prices of the period being measured.

Real GDP - the value of a nation's gross domestic product (GDP) after it has been adjusted for inflation.

Price index- a set of statistics that allows economists to compare prices over time.

Underground economy - illegal economic activities or unreported legal activities that are not accounted for in national economic measures.

Gross national product (GNP) - the total dollar value of all final goods and services produced with factors of production owned by citizens of a given country.

Leading Indicators- anticipate the direction in which the economy is headed.
Coincident Indicators- change as the economy moves from one phase of the business's cycle to another and tell economists that an upturn or a downturn in the economy has arrived.
Lagging Indicators- change months after an upturn or a downturn in the economy has begun and help economists predict the duration of economic upturns or downturns.

Peak- a high point in which the economy is at its strongest and most prosperous.

Contraction – a period in the business cycle during which business activity slows down and overall economic indicators decline.

Recession – a substantial and general decline in overall business activity over a significant  period of time.

Trough – the lowest point of a business cycle, in which demand, production, and employment reach their lowest levels.

Business cycle- a recurring pattern in economic activity that is characterized by alternating periods of expansion and contraction.

Depression - a prolonged and severe recession.

Real GDP per capita-  the dollar value- adjusted for inflation- of all final goods and services prduced pe person in an economy n a gven year.

Labor productivity- a measure of how much each worker produces in a given period of time.

Productivity growth- an increase in output per given level of input.

Capital-to-labor ratio- the amount of capital resources available per worker.

Capital deepening- the increasing of capital resources at a faster rate than the increasing of the labor force, causing a rise in the capital-to-labor ratio.  

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