Untitled Quiz

A statistic that measures a large-scale economic phenomenon or trend, like total income or unemployment rates.

The total value of all final goods and services produced within a country in a given period.

The rate at which average prices are rising or falling.

The percentage of the labor force that is without jobs.

Total spending at stores.

The imbalance of trade between a country and the rest of the world.

All people who are employed or actively seeking employment.

Data measuring aspects of an economy.

The rent value a homeowner would pay if renting their property, included in GDP.

Hard-to-measure or illicit goods and services are not counted in GDP.

Goods and services produced and consumed at home (like home-grown vegetables).

An economic exchange that takes place in the marketplace.

Gross Domestic Product – total value of all goods and services produced within a country.

Products and services that are illegal to produce or sell, excluded from GDP.

Excluded from GDP measures because they aren't bought or sold.

Unexpected outcomes sometimes result from how GDP is calculated or items are excluded.

A good used as an input in the production of another good. Example: Paper used to make greeting cards.

A good purchased by its final user. Example: A greeting card bought by a consumer.

Error in measuring GDP when the value of intermediate goods is included along with the value of final goods.

Adding to a firm's stock of goods that are unsold or unused. This is considered part of GDP.

Adding to a firm's inventory increases GDP. Selling goods from inventory decreases GDP.

A service that is not a physical object. Example: Haircut, Doctor visit

Marriage can reduce GDP because household services, previously bought in the market, are now performed within the household.

GDP includes the market value of all final goods and services produced within a country in a given period.

The year chosen as a reference point for comparing prices and quantities in different years. Prices in the base year are used to calculate real GDP.

A measure of economic output that adjusts for inflation using base-year prices. It reflects changes in the quantity of goods and services produced.

A measure of the average price level of all goods and services produced in an economy. It reflects changes in prices but not quantities.

A measure of economic output using current prices. It includes both changes in production and price levels.

Real GDP uses constant base-year prices to measure output, isolating changes in the quantity of goods and services. Nominal GDP uses current prices, reflecting both quantity and price changes.

Real GDP measures the actual production of goods and services, reflecting the economy’s ability to satisfy people’s needs and desires. It’s unaffected by inflation, making it a better indicator of economic growth.

The value of all goods and services produced in an economy at current prices.

In the base year, real GDP always equals nominal GDP because the prices used to calculate both are the same (current year prices = base year prices).

A general increase in the price level of goods and services over time.

GDP is calculated to gauge the overall health and performance of the economy. It helps measure economic growth, understand the standard of living, and make informed policy decisions.

Adjusting for inflation with constant prices helps us accurately assess actual changes in the production of goods and services. This is a more reliable measure of economic growth than nominal GDP.

The percentage change in a price index, such as the GDP deflator, over time.

The inflation rate between two consecutive years is calculated by dividing the difference between the GDP deflator in year 2 and the GDP deflator in year 1 by the GDP deflator in year 1 and multiplying by 100.

Inflation can affect purchasing power, savings, and investment decisions. It can also lead to distortions in relative prices.

A measure of the average change in prices paid by urban consumers for a basket of goods and services.

It divides nominal GDP by a price index (like the CPI) to give real GDP, which reflects the actual increase in output.

Analyzing real GDP trends over time can tell us about the long-term growth of an economy and the overall economic health.

Sustained real GDP growth allows for increased living standards, better economic opportunities, and overall prosperity for the population.