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Unit 3 Macroeconomic( Measuring economic activity and illustrating its…
Unit 3 Macroeconomic( Measuring economic activity and illustrating its variations)
gross domestic product
GDP is the total monetary value of all final goods and services produced within an economy in a given period of time.
national income
A measure of the total economic activity that takes place within an economy.
See entire glossary
circular flow of income
A model that illustrates the interactions between economic agents in an economy. It shows how factors of production, goods and income flow between households, firms, government, the financial sector and the foreign sector.
injections
The flows of money that come into the circular flow of income from outside: investment, government spending and exports.
leakages
The flows of money that leave the economy: savings, taxation and imports.
multinational corporations
Companies that operate in many countries with a headquarters based in one to coordinate the global operation.
gross national product
This refers to the total monetary value of all final goods and services produced by factors owned by the country’s citizens in a given period of time.
gross national income
This refers to the total income of a nation’s people and businesses.
Consumption
The expenditure by households on goods and services in the product market.
real GDP
GDP refers to the market value of all final goods and services produced within the borders of a country within a given period of time. Read GDP takes into account inflation.
nominal GDP
This refers to the GDP calculated in a given year without consideration for inflation.
calculation
GDP = C + I + G + (X – M)
deflator
The value that allows data to be measured over time in terms of a base period, usually through a price index.
Formula
Real GDP=Nominal GDP/Price deflator*100
Real GNI=Nominal GNI/Price deflator*100
Real GNI=
GDP per capita
This refers to the GDP divided by the population of a country, giving an average income per citizen.
purchasing power parity
PPP compares economic productivity and standards of living between countries on the basis of relative costs of goods and services.
Business cycle:
an expansionary phase
a peak phase
a contractionary phase
a trough
Economic growth
When a country produces more goods and services in one period than in a previous one. It is usually measured by changes in the real GDP.
Gross National Happiness
Happy Planet Index (approximate) ≈ life expectancy
experienced well-being
inequality of outcomes/ecological footprint
