Wednesday, January 19, 2011

Vocab Terms List (Blog 21)

National Income Accounting-refers to the bookkeeping system that a national government uses to measure the level of the country's economic activity in a given time period.

Gross Domestic Product-The monetary value of all the finished goods and services produced within a country's borders in a specific time period, though GDP is usually calculated on an annual basis.

Output-Expenditure Model-Gross Investment, Personal Consumption expenditures, government purchases of goods and services, and net exports of goods and services, or exports minus imports(X-M)/(C+I+G+(X-M)=GDP

Personal Consumption Expenditure-Consumer Purchases

Gross Investment-the total amount of investment without taking account of the cost of depreciation
Nominal GDP-A gross domestic product (GDP) figure that has not been adjusted for inflation.
Real GDP-An inflation-adjusted measure that reflects the value of all goods and services produced in a given year, expressed in base-year prices.

Price Index-Index that tracks inflation by measuring price changes

Underground Economy-consists of all trade that occurs without government permission or effectual intervention

Gross National Product-GNP is the total value of all final goods and services produced within a nation in a particular year, plus income earned by its citizens minus income of non-residents located in that country.

Business Cycle-The recurring and fluctuating levels of economic activity that an economy experiences over a long period of time.

Expansion-Period of Economic Growth

Peak-Point at which economy is at its strongest and most prosperous.


Depression-Prolonged and severe recessions

Trough-Demand, Production, and employment reach their lowest levels.

Leading Indicators-An economic indicator that changes before the economy has changed.

Coincident Indicators-An economic indicator which varies directly with, and at the same time as, the related economic trend, thereby providing information about the current state of the economy.

Lagging Indicators-A measurable economic factor that changes after the economy has already begun to follow a particular pattern or trend.

Real GDP Per Capita-GDP), gross national product (GNP) and net national income (NNI), all are indicators of a country's economic power. Many scholars and critics argue that economic components that are included in calculating GDP per capita are unscientific and lack various critical aspects of the economy. Nevertheless, in almost all countries, GDP per capita is used as a benchmark for measuring nation's economic progress.

Labor Productivity-A measurement of economic growth of a country. Labor productivity measures the amount of goods and services produced by one hour of labor.

Productivity Growth-in economics, the output of any aspect of production per unit of input. It is a measure of the output of a worker, machine, or an entire national economy in the creation of goods and services to produce wealth.

Capital-To-Labor Ratio-The ratio of capital available per worker

Capital Deepening- Capital deepening is an increase in capital intensity.

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