Circular Flow
Goods and services sold to other countries
What are exports?
An organization that produces goods and services for sale—and that employs members of households.
The goods and services sold to the last user
What are final goods and services?
GDP divided by the size of the population
What is GDP per capita?
The country with the highest GDP
Loans to firms in the form of an IOU that pays interest
What are bonds?
The total quantity of goods and services the economy produces
What is aggregate output?
Total value of all final goods and services produced in an economy during a given period
What is the Gross Domestic Product?
The total value of final goods and services produced in the economy during the year, adjusted for inflation
What is Real GDP?
Formula for net exports
What is (X-IM)?
The total income households have left after paying taxes and receiving government transfers
What is disposable income?
How the markets for goods and services interact with the rest of the world.
What are imports and exports?
Value of sales minus the value of purchases of inputs to avoid double counting
What is value added?
A GDP number that has not been adjusted for changes in prices
What is nominal GDP?
These keep track of the spending of consumers, sales of producers, business investment spending, government purchases, and a variety of other flows of money among different sectors of the economy.
What are the national income and product accounts?
Spending on new productive physical capital, such as machinery and buildings, and on changes in inventories
What is investment spending?
The three additional components of the expanded circular-flow diagram not included in the simplified model.
What are government, financial markets, and rest of the world?
At least 2 things not included in the GDP calculation
What are intermediate goods and services, inputs, used goods, financial assets such as stocks and bonds, foreign -produced goods and services?
The reason GDP might grow even when the economy has stopped growing
What is inflation or increase in price?
The component making up the largest percent of the GDP measured by aggregate spending
What is consumer spending?
The two exchanges in circular flow that result in the goods and services market not absorbing all household income
What are taxes and private savings?
How financial markets interact with the rest of the world
What is foreign borrowing, lending, purchases, and sales of stock?
The equation used to find GDP breaking it down into four sources of aggregate spending
C + I + G + X − IM
The average between the GDP growth rate calculated using an early base year and the GDP growth rate calculated using a late base year
What is chain-linking?
The changes in the GDP and the economy respectively in Portugal in 1975
What is increasing GDP and declining economy?