Economics Chapter 7 2
Terms
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- What are the national income and product accounts (or national accounts)?
- They keep track of the flows of money between different sectors of the economy.
- What is comsumer spending?
- Household spending on goods and services.
- What is a stock?
- It is a share in the ownership of a company held by a shareholder.
- What is a bond?
- It is borrowing in the form of an IOU that pays interest.
- What are government transfers?
- They are payments by the government to individuals for which no good or service is provided in return.
- What is disposable income?
- It is equal to income plus government transfers minus taxes. It is the total amount of household income avaliable to spend on consumption and to save.
- What is private savings?
- This is equal to disposable income minus consumer spending. It is disposable income that is not spent on consumption.
- What are finanical markets?
- They are the banking, stock, and bond markets which channel private savings and foreign lending into investment spening, government borrowing, and foreign borrowing.
- What is government borrowing?
- This is the amount of funds borrowed by the government in the finacial markets.
- What are government purchases of goods and services?
- They are government expenditures on goods and services.
- What are exports?
- They are goods and services sold to residents of other countries.
- What are imports?
- They are goods and services purchased from residents of other countries.
- What is investment spending?
- It is spening on productive physical capital, such as machinery and construction of structures, and on changes to investments.
- What are final goods and services?
- They are goods and services sold to the final, or end user.
- What are intermediate goods?
- They are goods and services bought from one firm by another firm, that are inputs for production of final goods and services.
- What is gross domestic product (GDP)?
- It it the total value of all final goods and services produced in the economy during a given year.
- What is aggregate spending?
- It is the total spending on domestically produced final goods and service in the economy, which are the sum of consumer spending, investment spending, governemnt purchases, and exports minus imports,
- What is the value added?
- The value added of a producer is the value of its sales minus the value of its purchases on inputs.
- What are net exports?
- They are the difference between the value of exports and the value of imports.