Chapter 18: Measuring the Production, Income, and Spending of Nations
capital income ††the sum of profits, rental payments, and interest payments.
consumer price index (CPI)††a price index equal to the current price of a fixed market basket of consumer goods and services relative to a base year.
consumption††purchases of final goods and services by individuals.
depreciation††the decrease in an assetís value over time; for capital, it is the amount by which physical capital wears out over a given period of time.
exports††the total value of the goods and services that people in one country sell to people in other countries.
final good††a new good that undergoes no further processing before it is sold to consumers.
GDP deflator††nominal GDP divided by real GDP; it measures the level of prices of goods and services included in real GDP relative to a given base year.
government purchases††purchases by federal, state, and local governments of new goods and services.
imports††the total value of the goods and services that people in one country buy from people in other countries.
intermediate good††a good that undergoes further processing before it is sold to consumers.
investment††purchases of final goods by firms plus purchases of newly produced residences by households.
labor income††the sum of wages, salaries, and fringe benefits paid to workers.
national saving††aggregate income minus consumption minus government purchases.
net exports††the value of exports minus the value of imports.
nominal GDP††gross domestic product without any correction for inflation; the same as GDP; the value of all goods and services newly produced in a country during some period of time, usually a year.
price level††the average level of prices in the economy.
real gross domestic product (real GDP)††a measure of the value of all the goods and services newly produced in a country during some period of time, adjusted for inflation.
trade balance††the value of exports minus the value of imports.
value added††the value of the firmís production minus the value of the intermediate goods used in production.