Rollin Rollin Rollin
In every economic transaction, receipts exactly equal expenditures
Goods and services flow in one direction and money payments flow in the other
What is the Circular Flow?
State, local, and federal, Valued at cost
What is Government Expenditure (G)?
The total market value of all final goods and services produced by factors of production located within a nation’s borders
What is Gross Domestic Product (GDP)
Goods used up entirely in the production of final goods
What are Intermediate Goods
This was the country used to compare their GDP to America's
What is France?
Transactions in which households buy goods
What is Product Markets
The creation of capital goods, such as factories and machines, that can yield production and hence consumption in the future
What is Gross Private Domestic Investment (I)
The sum of all income—wages, interest, rent, and profits—paid to the four factors of production
What is Gross Domestic Income (GDI)
A way of computing national income by adding up the dollar value at current market prices of all final goods and services
Measurements after adjustments have been made for changes in the average of prices between years; expressed in constant dollars
What is Real Values
Transactions in which businesses buy resources
What are Factor Markets
Durables: Life span of more than three years, Nondurables: Life span of less than three years, and Services: Intangible commodities
What are Consumption Expenditure (C)
The amount of income that households actually receive before they pay personal income taxes
What is Personal Income (PI)
A way of measuring national income by adding up income received by all factors of production
What is Income Approach
Measurements in terms of the actual market prices at which goods are sold; expressed in current dollars
What is Nominal Values
The yearly amount earned by the nation’s factors of production
What is Total Income
Total exports, minus total imports
What is Net Exports (Foreign Expenditures)/(X)
Personal income after personal income taxes have been paid
What is Disposable Personal Income (DPI)
Reduction in the value of capital goods over a one-year period due to physical wear and tear, and also to obsolescence
What is depreciation (capital consumption allowance)
Excludes non-market transactions, Does not measure national well-being
What are the limitations of GDP?
Goods and services that are at their final stage of production and will not be transformed into yet other goods or services
What are Final Goods and Services
Domestic investment minus an estimate of the wear and tear on the existing capital stock
What is Net Investment (net I)
The total of all factor payments to resource owners
What is National Income (NI)
Adjustments in exchange rate conversions that takes into account differences in the true cost of living across countries
What is Purchasing Power Parity
C+I+G+X
How do you tabulate GDP?