click below
click below
Normal Size Small Size show me how
Economics-Mankiw-P8
Definitions of the newest Mankiw (Special edition with financial crisis)Ch.23-24
Question | Answer |
---|---|
Microeconomics | the study of how households and firms make decisions and how they interact in markets |
Macroeconomics | the study of economy-wide phenomena, including inflation, unemployment and economic growth |
Gross domestic product (GDP) | the market value of all final goods and services produced within a country in a given period of time |
Consumption | spending by households on goods and services, with the exception of purchases of new housing |
Investment | spending of capital equipment, inventories and structures, including household purchases of new housing |
Government purchases | spending on goods and services by local, state and national governments |
Net exports | spending on domestically produced goods by foreigners (exports) minus spending on foreign goods by domestic residents (imports) |
Nominal GDP | the production of goods and services valued at current prices |
Real GDP | the production of goods and services valued at constant prices |
GDP deflator | a measure of price level calculated as the ratio of nominal GDP to real GDP times 100 |
Consumer price index (CPI) | a measure of the overall cost of the goods and services bought by a typical costumer |
Inflation rate | the percentage change in the price index from the preceding period |
Producer price index | a measure of the cost of a basket of goods and services bought by firms |
Indexation | the automatic correction of a money amount for the effects of inflation by law or contract |
Nominal interest rate | the interest rate as usually reported without a correction for the effects of inflation |
Real interest rate | the interest rate corrected for the effects of inflation |