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Test Bank for Macroeconomics - GDP 11th Edition by N. Gregory Mankiw
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Test Bank for Macroeconomics - GDP 11th Edition by N. Gregory Mankiw
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Test Bank for Macroeconomics - GDP11th Edition by N. Gregory Mankiw
GDP - Gross Domestic Product - ANSThe total market value of all final goods and services
produced annually within a country's borders.
Final Good - ANSA good in the hand of its final user. (e.g. buy goods at HEB)
Intermediate good - ANSA good that is an input to the production of a final good. e.g. farmer
taking goods to mill
Double/multiple counting - ANSCounting a good more than once when computing GDP
Transfer payment - ANSA payment to a person that is not made in return for goods and services
currently supplied. (Social security?)
Per Capita GDP - ANSIf we divide a country's GDP by the population in the country, we get per
capita GDP.
Calculate GDP - ANSmultiply the quantity of each good produced by the quantity of good
produced. GDP=[PQ
Consumption/household sector - ANSSum of spending on durable goods, non durable goods
and services. largest component of US GDP - 70%
Durable goods - ANSGoods that are expected to last for more than 3 years e.g. refrigerators
ovens or cars
Non durable goods - ANSGoods that are not expected to last for more than 3 years e.g. food
Services - ANSintangible items eg lawn are, car repair and entertainment
Investment/Business sector - ANSThe sum of all purchases of newly produced capital goods,
changes in business inventories and purchases of new residential housing. e.g. new
machincery
Government purchases - ANSFederal, state and local government purchases of goods and
services and gross investment in highways, bridges and so on
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