Lecture 9 Gross Domestic Product

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Lecture 9 Gross Domestic Product
2014-03-05 19:42:31
economics gross domestic product
What is involved in Gross Domestic Product in the U.S.
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  1. What are the four ways to measure an economy's strength?
    • 1. Standard of living
    • 2. Employment and Types of Employment
    • 3. International Trade
    • 4. Production
  2. What is GDP? What does it do?
    • The total market value of all final goods and services produced annually.
    • It can measure economic strength, compare how a country is performing over time, and provide a comparison of how a country performs globally
  3. What is the formula for GDP?
    • GDP = C + I+ G + Xn
  4. What does the "C" represent in the GDP formula?
    • Personal Consumption Expenditures
    • Combination of what households spend annually on durables, nondurables, and services
    • Largest component of GDP
  5. What does the Ig stand for in the GDP formula?
    • Gross Private Domestic Investment
    • Combination of final purchases of businesses, construction expenses, and increase/decrease of inventory
    • Measures overall strength of a firm or industry
    • Shows growth or lack of growth in business sector
  6. What does the G stand for in the GDP formula?
    • Government Purchases
    • Combination of government purchases of final goods, services, and public sector capital
  7. What does the Xn stand for in the GDP formula?
    • Net exports
    • Domestically produced goods or services that are exported out of the country
  8. What in inflation? What is used to compensate for this?
    • The fluctuation of the value of money as it increases or decreases over time.
    • Real GDP
  9. What is the important element for all economies?
  10. What are the 4 factors involved in growth?
    • 1. Specialization of firms
    • 2. Increase in personal consumption
    • 3. Globalization
    • 4. Technology
  11. _____ in technology = _____ in production costs = _____ in production
    • Increase
    • Decrease
    • Increase
  12. What three things do some economists criticize about growth?
    • 1. Environment degradation - pollution - greenhouse gases
    • 2. Human stress in changing lifestyles
    • 3. Depletion of natural resources
  13. What three things do some economists encourage about growth?
    • 1. Improved standard of living
    • 2. Question environmental impact or encourage green industries
    • 3. Question limited natural resources and encourage selective removal of resources