Key Concepts

Match each of the terms on the left with its definition on the right. Click on the term first and then click on the matching definition. As you match them correctly they will move to the bottom of the activity.

Question

business cycles
double-dip recession
yield curve
circular flow diagram
gross domestic product (GDP)
personal consumption expenditures
gross private domestic investment (GPDI)
government spending
net exports
national income
net domestic product
personal income
disposable personal income
GDP per capita
informal economy
Gross domestic product minus depreciation, or the capital consumption allowance
Includes the wages and salaries of government employees (federal, state, and local); the purchase of products and services from private businesses and the rest of the world; and government purchases of new structures and equipment
Personal income minus taxes
A country’s GDP divided by its population. GDP per capita provides a useful measure of a country’s relative standard of living
Goods and services purchased by residents of the United States, whether individuals or businesses; they include durable goods, nondurable goods, and services
Investments in such things as structures (residential and nonresidential), equipment, and software, and changes in private business inventories
Exports minus imports for the current period. Exports include all the items we sell overseas such as agricultural products, movies, and technology products. Imports are all those items we bring into the country, such as vegetables from Mexico, wine from Italy, and cars from Germany
Illustrates how households and firms interact through product and resource markets and shows that economic aggregates can be determined by either examining spending flows or income flows to households
A recession that begins after only a short period of economic recovery from the previous recession
Shows the relationship between the interest rate earned on a bond (measured on the vertical axis) and the length of time until the bond’s maturity date (shown on the horizontal axis)
Alternating increases and decreases in economic activity that are typically punctuated by periods of recession and recovery
All income, including wages, salaries, and other labor income; proprietors’ income; rental income; personal interest and dividend income; and transfer payments (welfare and Social Security payments) received, with personal contributions for social insurance subtracted out
Includes all transactions that are conducted but are not licensed and/or generate income that is not reported to the government (for tax collection)
A measure of the economy’s total output; it is the most widely reported value in the national income and product accounts (NIPA) and is equal to the total market value of all final goods and services produced by resources in a given year
All income, including wages, salaries and benefits, profits (for sole proprietors, partnerships, and corporations), rental income, and interest
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