Output correct answers The result of production in a year. Output is measured by GDP.
GDP (Gross Domestic Product) correct answers The total value of final goods and services produced in a year. It's gross because it does not subtract depreciation.
Take the number of things produced, multipl...
AGEC 217 – Purdue || Already Graded A+.
Output correct answers The result of production in a year. Output is measured by GDP.
GDP (Gross Domestic Product) correct answers The total value of final goods and services
produced in a year. It's gross because it does not subtract depreciation.
Take the number of things produced, multiply by the price at which those things sold, and add up
the resulting dollar values.
GDP = Q = C + I + G + X - M
Consumption correct answers Output purchased by households or "consumers".
Investment correct answers Output mostly purchased by businesses.
Government Purchases correct answers Resources or inputs purchased by government
Transfer Payments correct answers Revenue collected from taxpayers and distributed to retired
people, disabled people, sick people, unemployed people or poor people. (Not included in GDP)
Exports correct answers Sales of goods and services to people, businesses, and governments of
other countries.
Imports correct answers Purchases of goods and services from people, businesses, and
governments of other countries.
Real GDP correct answers Nominal GDP divided by a price index, or deflator.
Real GDP falls during recessions, and rises during expansions.
Nominal GDP correct answers Output measured in current prices, the prices that existed in the
year the output was produced.
Real GDP Growth correct answers The percentage change in real GDP from one year to the next.
Price Index correct answers The GDP deflator, is used to change nominal GDP to real GDP.
There are two main price indexes used to measure inflation. One is the GDP deflator, and the
other is the CPI.
Inflation correct answers Increases in the price index imply that the prices of goods and services
have increased, on average.
Deflation correct answers Decreases in the price index imply that the prices of goods and
services have increased, on average.
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