The market value of all final goods and services produced in a nation during a period of time, usually a year.
A goverment payment to individuals not it exchange for goods or sercives currently produced.
Finished goods and services produced for the ultimate user.
Goods and services used as inputs for the production of final goods
A flow is the rate of change in a quantity during a given time period, such as dollars per year. For example, income and consumptios are flows that accour per week, per month, or per year.
A quantity measured at one point in time. For example, an inventory of goods or the amount of money in a checking account.
The national income accounting method that measures GDP by adding all the spending for final goods during a period of time.
Expenditure approach accounts
Personal Consumption expenditures (C)Gross private domestic investment (I)Gov consumption expenditues and gross investment (G)Net exports of goods and services (X - M)
Formula: GDP = C+I+G+(X-M)
The national income accounting method that measures GDP by adding all incomes, including compensations of employees, rents, net interest and profits.
Income Approach accounts
Compensations of employees
Indirect Business Taxes
Indirect business Taxes
Taxes levied as a % of the prices of goods sold and therefore collected as part of the firm's revenue. Firms treat such taxes as production cost. Example include general taxes, excise taxes, and costoms duties.
The Underground Economy
Illegal gambling, prostitution, loan-sharking, illegal guns, illegal drugs are examples af underground economy
The total income earned by resources owners, including wages, rents, interest and profits. NI is calculated as GDP minus depreciation of the capital worn out in producing output.
Persoal Income (PI)
The total income received by households that is available for consumption, savings, and payment of personal taxes.
Disposable personal income (DI)
The amount of income that housholds actually have to spend or save after payment of personal taxes.
The value all final goods based on the prices existing during the time period of production.
The value of all final goods produced during a given time period based on the priced existing in a selected base year.
GDP chain price index
A measures that compares changes in the prices of all final goods during a given year to the prices of those goods in a base year.