Page 16 - Macroeconomics. book docx_Neat

Aggregate Economic Activity: The total level of economic production and services in an
economy during a specific period.

Gross Domestic Product (GDP): The total market value of all final goods and services
produced within a country during a given time period.

Market Value: The use of market prices to measure and combine different goods and
services.

Final Goods and Services: Goods and services purchased for final use and not for further
production.

Intermediate Goods: Goods used as inputs in the production of other goods.

Expenditure Approach: A method of calculating GDP by summing total spending on final

goods and services.

Income Approach: A method of calculating GDP by summing all incomes earned by
factors of production.

Production (Value Added) Approach: A method of calculating GDP by measuring value

added at each stage of production.

Consumption (C): Household spending on goods and services such as food, clothing, and
healthcare.

Investment (I): Spending on capital goods such as machinery, equipment, and buildings.

Government Spending (G): Government expenditure on goods and services provided to
the public.

Exports (X): Goods and services produced domestically and sold to other countries.

Imports (M): Goods and services produced abroad and purchased domestically.

Nominal GDP: GDP measured using current prices of the same year.

Real GDP: GDP measured using constant prices to remove the effect of inflation.

GDP deflator: A price index used to measure changes in the overall price level of the
economy.

Economic Growth: An increase in real GDP over time.

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