Term
| national income accounting |
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Definition
| The techniques used to measure the overall production of the economy and other related variables for the nation as a whole. |
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Term
| gross domestic product (GDP) |
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Definition
| The total market value of all final goods and services produced annually within the boundaries of the United States, whether by U.S.- or foreign-supplied resources. |
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Definition
| Products that are purchased for resale or further processing or manufacturing. |
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Term
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Definition
| Goods that have been purchased for final use and not for resale or further processing or manufacturing. |
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Term
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Definition
| Wrongly including the value of intermediate goods in the domestic product; counting the same good or service more than once. |
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Term
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Definition
| The value of a product sold by a firm less the value of the products (materials) purchased and used by the firm to produce that product. |
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Term
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Definition
| The method that adds all expenditures made for final goods and services to measure the gross domestic product. |
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Term
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Definition
| The method that adds all the income generated by the production of final goods and services to measure the gross domestic product. |
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Term
| personal consumption expenditures (C) |
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Definition
| The expenditures of households for durable and nondurable consumer goods and services. |
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Term
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Definition
| A consumer good with an expected life (use) of three or more years. |
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Term
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Definition
| A consumer good with an expected life (use) of less than three years. |
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Term
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Definition
| An intangible act or use for which a consumer, firm, or government is willing to pay. |
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Term
| gross private domestic investment (Ig) |
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Definition
| Expenditures for newly produced capital goods (such as machinery, equipment, tools, and buildings) and for additions to inventories. |
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Term
| net private domestic investment |
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Definition
| Gross private domestic investment less consumption of fixed capital; the addition to the nation's stock of capital during a year. |
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Term
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Definition
| Expenditures by government for goods and services that government consumes in providing public goods and for public capital that has a long lifetime; the expenditures of all governments in the economy for those final goods and services. |
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Definition
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Term
| taxes on production and imports |
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Definition
| A national income accounting category that includes such taxes as sales, excise, business property taxes, and tariffs which firms treat as costs of producing a product and pass on (in whole or in part) to buyers by charging a higher price. |
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Term
| consumption of fixed capital |
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Definition
| An estimate of the amount of capital worn out or used up in producing the gross domestic product; also called depreciation |
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Term
| net domestic product (NDP) |
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Definition
| Gross domestic product less the part of the year's output that is needed to replace the capital goods worn out in producing the output; the nation's total output available for consumption or additions to the capital stock. |
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Term
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Definition
| The earned and unearned income available to resource suppliers and others before the payment of personal taxes. |
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Term
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Definition
| Personal income less personal taxes; income available for personal consumption expenditures and personal saving. |
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Term
| nominal gross domestic product (GDP) |
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Definition
| GDP measured in terms of the price level at the time of measurement; GDP not adjusted for inflation. |
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Term
| real gross domestic product (GDP) |
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Definition
| Gross domestic product adjusted for inflation; gross domestic product in a year divided by the GDP price index for that year, the index expressed as a decimal. |
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Term
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Definition
| An index number that shows how the weighted-average price of a "market basket" of goods changes over time. |
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Term
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Definition
| (1) An outward shift in the production possibilities curve that results from an increase in resource supplies or quality or an improvement in technology; (2) an increase of real output (gross domestic product) or real output per capita. |
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Term
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Definition
| Inflation-adjusted output per person; real GDP/population |
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Term
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Definition
| A method for determining the number of years it will take for some measure to double, given its annual percentage increase. Example: to determine the number of years it will take for the price level to double, divide 70 by the annual rate of inflation. |
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Term
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Definition
| The historically recent phenomenon in which nations for the first time have experienced sustained increases in real GDP per capita. |
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Term
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Definition
| As it relates to economic growth, countries that develop and use advanced technologies, which then become available to follower countries. |
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Term
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Definition
| As it relates to economic growth, countries that adopt advanced technologies that previously were developed and used by leader countries. |
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Term
| supply factors (if growth) |
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Definition
| The capacity of an economy to combine resources effectively to achieve growth of real output that the supply factors (of growth) make possible. |
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Term
| demand factor (in growth) |
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Definition
| The increase in the level of aggregate demand that brings about economic growth made possible by an increase in the production potential of the economy. |
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Term
| efficiency factor (in growth) |
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Definition
| The capacity of an economy to combine resources effectively to achieve growth of real output that the supply factors (of growth) make possible. |
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Term
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Definition
| Total output divided by the quantity of labor employed to produce it; the average product of labor or output per hour of work. |
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Term
| labor-force participation rate |
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Definition
| The percentage of the working-age population that is actually in the labor force. |
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Term
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Definition
| The bookkeeping of the supply-side elements such as productivity and labor inputs that contribute to changes in real GDP over some specific time period. |
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Term
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Definition
| The capital goods usually provided by the public sector for use by citizens and firms (for example, highways, bridges, transit systems, wastewater treatment facilities, municipal water systems, and airports). |
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Term
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Definition
| The knowledge and skills that make a person productive. |
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Term
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Definition
| Reductions in the average total cost of producing a product as the firm expands the size of plant (its output) in the long run; the economies of mass production. |
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Term
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Definition
| New and more efficient methods of delivering and receiving information through the use of computers, fax machines, wireless phones, and the Internet. |
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Term
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Definition
| A new firm focused on creating and introducing a particular new product or employing a specific new production or distribution method. |
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Term
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Definition
| An increase in a firm's output by a larger percentage than the percentage increase in its inputs. |
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Term
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Definition
| Incerases in the value of a product to each user, including existing users, as the total number of users rises. |
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Term
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Definition
| Achieving greater productivity and lower average total cost through gains in knowledge and skill that accompany repetition of a task; a source of economies of scale. |
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Term
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Definition
| Recurring increases and decreases in the level of economic activity over periods of years; consists of peak, recession, trough, and expansion phases. |
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Term
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Definition
| The point in a business cycle at which business activity has reached a temporary maximum; the economy is near or at full employment and the level of real output is at or very close to the economy's capacity. |
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Term
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Definition
| A period of declining real GDP, accompanied by lower real income and higher unemployment. |
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Term
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Definition
| The point in a business cycle at which business activity has reached a temporary minimum; the point at which a recession has ended and an expansion (recovery) begins. |
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Term
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Definition
| A phase of the business cycle in which real GDP, income, and employment rise. |
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Term
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Definition
| Persons 16 years of age and older who are not in institutions and who are employed or are unemployed and seeking work. |
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Term
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Definition
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Term
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Definition
| Employees who have left the labor force because they have not been able to find employment. |
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Term
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Definition
| A type of unemployment caused by workers voluntarily changing jobs and by temporary layoffs; unemployed workers between jobs. |
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Term
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Definition
| A type of unemployment caused by insufficient total spending (or by insufficient aggregate demand). |
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Term
| full-employment rate of employment |
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Definition
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Term
| natural rate of unemployment (NRU) |
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Definition
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Term
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Definition
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Term
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Definition
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Term
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Definition
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Term
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Definition
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Term
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Definition
| A decline in the economy's price level. |
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Term
| Consumer Price Index (CPI) |
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Definition
| An index that measures the prices of a fixed "market basket" of some 300 goods and services bought by a "typical" consumer. |
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Term
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Definition
| Increases in the price level (inflation) resulting from an excess of demand over output at the existing price level, caused by an increase in aggregate demand. |
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Term
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Definition
| Increases in the price level (inflation) resulting from an increase in resource costs (for example, raw-material prices) and hence in per-unit production costs; inflation caused by reductions in aggregate supply. |
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Term
| per-unit production costs |
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Definition
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Term
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Definition
| The underying increases in the price level after volatile food and energy prices are removed. |
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Term
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Definition
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Term
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Definition
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Term
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Definition
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Term
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Definition
| Increases in the price level (inflation) that occur at the expected rate. |
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Term
| cost-of-living adjustments (COLAs) |
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Definition
| An automatic increase in the incomes (wages) of workers when inflation occurs; guaranteed by a collective bargaining contract between firms and workers. |
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Term
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Definition
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Term
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Definition
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Term
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Definition
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Term
| aggregate demand-aggregate supply (AD-AS) model |
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Definition
| The macroeconomic model that used aggregate demand and aggregate supply to determine and explain the price level and the real domestic output. |
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Term
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Definition
| A schedule or curve that shows the total quantity of goods and services demanded (purchased) at different price levels. |
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Term
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Definition
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Term
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Definition
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Term
| determinants of aggregate demand |
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Definition
| Factors such as consumption spending, investment, government spending, and net exports that, if they change, shift the aggregate demand curve. |
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Term
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Definition
| A schedule or curve showing the total amount spent for final goods and services at different levels of real GDP |
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Term
| immediate-short-run aggregate supply curve |
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Definition
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Term
| short-run aggregate supply curve |
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Definition
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Term
| long-run aggregate supply curve |
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Definition
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Term
| determinants of aggregate supply |
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Definition
| Factors such as input prices, productivity, and the legal-institutional environment that, if they change, shift the aggregate supply curve. |
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Term
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Definition
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Term
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Definition
| The price level at which the aggregate demand curve intersects the aggregate supply curve. |
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Term
| equilibrium real (domestic) output |
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Definition
| The gross domestic product at which the total quantity of final goods and services purchased (aggregate expenditures) is equal to the total quantity of final goods and services produced (the real domestic output); the real domestic output at which the aggregate demand curve intersects the aggregate supply curve. |
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Term
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Definition
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Term
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Definition
| A wage that minimiizes wage costs per unit of output by encouraging greater effort or reducing turnover. |
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