Post 21: Vocab Terms

Terms:

national income accounting- the bookkeeping system that a national government uses to measure the level of the country's economic activity in a given time period.

gross domestic product- The monetary value of all the finished goods and services produced within a country's borders in a specific time period, though GDP is usually calculated on an annual basis

output-expenditure model- The output expenditure model tend to depreciate the currency and only temporarily raise gross domestic product and the current account surplus, although permanently raise the domestic price level

personal consumption expenditure- A measure of price changes in consumer goods and services. Personal consumption expenditures consist of the actual and imputed expenditures of households

gross investment- A measure of additions to the capital stock that does not subtract depreciation of existing capital.

nominal GDP- A gross domestic product (GDP) figure that has not been adjusted for inflation

real GDP- An inflation-adjusted measure that reflects the value of all goods and services produced in a given year, expressed in base-year prices

price index- Percentage number that shows the extent to which a price (or a 'basket' of prices) has changed over a period (month, quarter, year) as compared with the price(s) in a certain year (base year) taken as a standard.

underground economy- refers to both legal activities, such as often found in construction and services industries where taxes are not withheld and paid, and illegal activities

gross national product- is the value of all the goods and services produced in an economy, plus the value of the goods and services imported, less the goods and services exported.

business cycle- The recurring and fluctuating levels of economic activity that an economy experiences over a long period of time

expansion- The phase of the business cycle when the economy moves from a trough to a peak

peak contraction- The highest point between the end of an economic expansion and the start of a contraction in a business cycle

recession- A significant decline in activity across the economy, lasting longer than a few months. It is visible in industrial production, employment, real income and wholesale-retail trade

depression- A severe and prolonged recession characterized by inefficient economic productivity, high unemployment and falling price levels

trough- The stage of the economy's business cycle that marks the end of a period of declining business activity and the transition to expansion

leading indicators- Leading indicators are indicators in economics and finance used to predict the future

coincident indicators- Economic and financial market indicators which tend to move in step with (1) general economic trends such as gross domestic product (GDP), employment levels, retail sales, and/or (2) financial market trends such as interest rates and stockmarket prices.

lagging indicators- are indicators in economics and finance used to measure past performance

real GDP per capita- A country's real GDP per member of the population. This may be calculated using the total population.

labor productivity- Rate of output per worker (or a group of workers) per unit of time as compared with an established standard or expected rate of output.

productivity growth- is a measure of output from a production process, per unit of input. For example, labor productivity is typically measured as a ratio of output per labor-hour, an input

capital-to-labor ratio- The ratio of capital to labor employed in a process, a firm or an industry

capital deepening- is a term used in economics to describe an economy where capital per worker is increasing