Economics- Chapter 12: Gross Domestic Product

Gross domestic product, you get the point

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What is GDP
Gross Domestic Product- a NIPA measures track production, income and consumption in a nations economy.
What are the three components of GDP?
1) Must be a final input 2) Must have been made in the current year 3) Has to be an output produced within borders.
What are the four sectors of GDP?
1) Personal consumption expenditures (C) 2) Gross investment (I) 3) Government purchases of goods (G) 4) Net exports and imports (X-M)
What is nominal GDP?
Expressed in current prices for that period.
What is the price index?
Set of statistics that allows economists to compare prices over time.
What are the four limitations of GDP?
1) Not very accurate and timely 2) Does not count non-market activities 3) Illegal transactions not accounted 4) Benefits usually not reported but bads are.
What is the business cycle? and its four phases?
Fluctuations or changes in the market system activity. Expansion, Peak, Contraction and trough.
What are the four influences of the Business Cycle?
1) Business investment 2) Money and credit 3) Public Expectations 4) External factor
List the three indicators of the business cycle.
1) Leading indicator, anticipates 2) Coincidental indicator, current 3) Lagging indicator, after the business cycle has changed.