GDP & Output
Intermediate goods (like raw steel used to build a car) are excluded from GDP calculations for this specific reason.
What is to avoid double-counting?
The economic formula used to calculate a country's net exports.
What is Total Exports minus Total Imports?
The primary underlying economic cause of unemployment in an economy.
What is reduced consumer demand for goods and services?
The peak phase of the business cycle characterized by low unemployment, high output, and strong consumer spending.
What is Prosperity?
Business spending on major long-term physical assets, such as purchasing new factory machinery or constructing a new building.
What is a capital project?
Of mowing your own lawn, buying a used car, doing unpaid volunteer work, or buying a newly manufactured student laptop, this item is included in GDP.
What is the newly manufactured student laptop?
This government fiscal condition occurs when spending expenditures exceed total tax revenues collected in a year.
What is a budget deficit?
Doing this to employee training and development programs hurts worker productivity rather than helping it.
What is cutting training programs to lower short-term expenses?
Type of inflation caused specifically by increases in production costs, such as raw materials and worker wages.
What is cost-push inflation?
Purchasing this security grants an investor equity and partial ownership in a corporation.
What is stock?
The mathematical formula used to calculate GDP per capita.
What is Total GDP divided by total population?
Term for rapidly growing developing economies (such as BRICS nations) that offer expanding international trade opportunities.
What are emerging markets?
This economic condition causes price levels to fall and money's buying power to rise, but overall consumer spending drops due to high unemployment and low income.
What is deflation?
The price metric that compares the cost of a fixed market basket of goods and services in one period to its cost in a base year.
What is the Consumer Price Index (CPI)?
True or False: Purchasing a corporate bond grants an investor equity and ownership in that corporation.
What is False? (Bonds represent debt owed to investors, whereas stock represents equity.)
Measurement of GDP that has been adjusted for inflation to show true economic output growth over time.
What is Real GDP?
A financial state that occurs when a government collects more in tax revenue than it spends on public programs during a fiscal year.
What is a budget surplus?
All individuals age 16 and older who are either currently working or actively seeking employment.
What is the labor force?
Type of inflation that occurs when total consumer demand for goods and services grows faster than the economy's capacity to produce them.
What is demand-pull inflation?
The benchmark interest rate that commercial banks charge their most creditworthy corporate customers.
What is the prime rate?
The four main components that make up total GDP: consumer spending, business investment, government spending, and this trade calculation.
What are Net Exports?
The total cumulative amount of money owed by a national government to lenders over time, created by accumulated annual budget deficits.
What is the National Debt?
The measure of economic production calculated by dividing total output by the total number of worker-hours worked.
What is worker productivity?
The four sequential phases of the business cycle in chronological order starting from the peak.
What are Prosperity, Recession, Depression, and Recovery?
Profits kept by a business and reinvested into capital projects rather than distributed to stockholders as dividends.
What are retained earnings?