| A | B |
|---|
| leading indicators | economic variables that anticipate the direction in which the economy is headed--number of building permits/orders for capital goods and equipment/prices of raw materials/prices of stock |
| nominal GDP | GDP expressed in the current prices of the period being measured |
| capital-to-labor ratio | the amount of capital stock available per worker |
| national income accounting | the process of tracking production, income, and consumption in a nation's economy |
| personal consumption expenditures | consumer purchases |
| gross national product | Used widely until 1991 - the total dollar value of all final output produced with factors of production owned by residents of a given country during one year |
| net national product | GNP - depreciation on equipment and machinery - a good measure of a nation's output |
| recession | a decline in real GDP for two or more consecutive quarters - six months or more |
| real GDP | GDP adjusted for price changes |
| business cycles | fluctuations, or changes, in economic activity that occur in a market system |
| gross domestic product | the most widely used national income account - the total dollar value of all final goods and services produced within a country during one calendar year |
| coincident indicators | economic variables that provide information about the current status of the economy--people's incomes/sales income/production levels |
| labor productivity | how much each worker produces in a given period of time |
| gross investment | the total value of all the capital goods produced in a nation, plus the changes in dollar value of business inventories in a year |
| lagging indicators | economic variables that change months after an economic upturn or downturn has begun--how busineses are doing/use of credit by consumers |
| price index | a set of statistics that allows economists to compare prices over time |
| productivity growth | an increase in the output of each worker per hour of work |
| trough | the point at which demand, production, and employment reach their lowest levels |
| capital deepening | An increase in the amount of capital goods available per worker |
| real GDP per capita | the real dollar value of all final goods and services produced per person for a specified period of time |
| expansion | a period of economic growth |
| output-expenditure model | Used to compute GDP (C + I + G = (X-M) |
| underground economy | economists use this term to refer to illegal economic activities and unreported legal economic activities |
| depression | prolonged and severe recession |
| washing machine, big screen TV, going to the dentist would be included in which sector of GDP? | personal consumption expenditures (C) |
| The Air Force buying new drones for the military would be included in which sector of GDP? | government purchases(G) |
| Buying a purse made in Australia would be included in which sector of GDP? | net exports of goods and services (X-M) |
| Scheels Sporting Goods building a new building in Rochester would be included in which sector of GDP? | gross private domestic investment (I) |
| wage | hourly, weekly, monthly, or yearly pay that a worker receiveds in exchange for his or her labor |
| peak | the stage of the business cycle where the economy is at its strongest |
| the C of GDP represents | Consumer expenditures |
| the G of GDP represents | Government expenditures |
| the I of GDP represents | Business Investment |
| the X-M of GDP represents | Net Exports |
| durable good | a good that lasts longer than one year--TV/Car/Washing Machine |
| nondurable good | a good that has a short life--toilet paper/cosmetics/food |
| service | something done for you--going to the dentist/having your hair done |
| Why GDP data gathering can be slow | lots of data to input/sometimes not releasted until the end of the next quarter of the year |
| What the black market? | illegal activities not reported in GDP--drug dealing, etc. |
| What are non-market activities?/ | Don't involve money being exchanged |
| Goods/Bads | good things or bad things aren't taken into account in GDP--environmental concerns or people's happiness factor |
| The 3 Reasons why economic growth is important | (1) maintain standard of living (2) compete in global markets (3) take care of domestic problems/concerns |
