Chapter 10 - Measuring a Nation's Income

Investment

________- the purchase of goods that will be used in the future to produce more goods and services.

Consumption

________- spending by households on goods and services, with the exception of purchases of new housing.

Gross domestic product (GDP)

the market value of all final goods and services produced within a country in a given period of time.

Money

________ continuously flows from households to firms and back to households.

persons income

A(n) ________ determines whether they can afford higher standards of living.

Net exports

________- spending on domestically produced goods by foreigners (exports) minus spending on foreign goods by domestic residents (imports) 10.4 Real Versus Nominal GDP.

GDP

________ per person seems a natural measure of the economic well- being of the average individual.

GDP

________ adds together different kinds of products into a single measure of the value of the economic activity.

Government purchases

spending on goods and services by local, state, and federal governments

Nominal GDP

the production of goods and services valued at current prices